Today's Local Real Estate News

According to The South Florida Business Journal, Florida is nipping at the heels of California to lead the nation in forclosures:

“The Sunshine State saw a spike in pre-foreclosure filings last month, pushing it to No. 2 in the nation in total filings and filings per capita so far this year, Foreclosures.com said.”

“Florida recorded 111,236 year-to-date pre-foreclosures, second only to California's 132,101.”

“For July, Florida posted 21,120 filings, compared with 13,005 filed in June. Florida's July numbers lagged behind only California, with 23,662, but were well ahead of the 6,498 filed in Texas.”

“‘The numbers are dismal, but we had better get used to it because the blood-letting will likely continue for another 12 to 18 months,’ Foreclosures.com President Alexis McGee said. ‘It's a tough reality, but many more overextended homeowners not even in default yet won't be able to refinance because of tightened credit markets and will eventually lose their homes to foreclosure.’”

The Sun-Sentinel reports on foreclosures in St. Lucie County:

“The number of mortgage foreclosures filed in the county this summer has skyrocketed, causing the legal community to try to find new ways to help those in danger of losing their homes.”

“Local economists and court officials say it's a nationwide trend and themes run through many of the cases, such as home buyers taking on adjustable-rate mortgages that now carry higher interest rates and the rise in insurance and property taxes for some residents. Others bought the homes as investment properties, but are now having trouble keeping up with payments.”

“Of the 550 civil cases filed in circuit court in July, nearly 80 percent were mortgage foreclosures, records show. There were four times as many foreclosures filed in July as there were during the same time period last year and it is likely more than 3,000 will have been filed by year's end.”

As I predicted, the calls for a Federal bailout of F-cked Buyers facing foreclosures is gaining steam. Yesterday, Hillary Clinton proposed spending $1 billion on the crisis – a sum that will not put a dent in the impending crisis. The Sun-Sentinel reports:

“Presidential hopeful Hillary Rodham Clinton is calling for penalties on unscrupulous mortgage brokers who engage in predatory lending and a $1 billion federal fund to help homeowners avoid foreclosure.”

“She also wants an increase in affordable housing options.”

“‘Everybody wants these (lending) organizations to be successful, but not at the cost of taking advantage of the consumer,’ Clinton told The Associated Press in advance of a speech planned Tuesday. ‘And the unfortunate fact is, many people have gotten into the mortgage market who are being exploited and abused by boiler-room mortgage-lending operations that are just like selling phony penny stocks or the old traveling salesmen with the snake oil.’”

The Miami Herald reports that many condo buyers are simply walking away from their sales contracts:

“WCI Communities said 17 percent of its condominium buyers have walked away rather than close on new units this year, the latest indication of trouble in the condo market.”

“That's higher than the 8 percent to 10 percent rate WCI predicted at the beginning of the year.”

“With a record number of condo towers under construction and the housing market slumping, market watchers are keeping a close eye on how many buyers actually close on units they contracted to purchase. More cancellations mean more condos on the market, and more downward pressure on prices.”

“‘Buildings yet to close from now through the middle of 2009 will see progressively higher walkaways because they were contracted later in the boom cycle when prices were at the highest point,’ said Deerfield Beach real estate analyst Jack McCabe, who has long argued that too many condos were built.”

Note that this is the same Jack McCabe featured in a recent video post.

The Sun-Sentinel reports on another failing real-estate-related business with offices in South Florida:

“American Home Mortgage Investment Corp. filed for bankruptcy protection on Monday, the latest casualty of a mortgage industry that has plunged into distress.”

“The Melville, N.Y.-based company's request for Chapter 11 bankruptcy protection — filed in bankruptcy court in Wilmington, Del. — caps a tumultuous 10 days for what had been the nation's 10th-biggest home lender.”

“American Home Mortgage said it fell victim to ‘extraordinary disruptions’ in the markets that support the mortgage industry. A cold housing market and a spike in payment defaults scared investors away from mortgage debt, including bonds and other securities backed by home loans.”

“The lender, which had offices in Boca Raton and Delray Beach, joins more than 50 others in bankruptcy this year as the fallout from the nation's housing slump continues.”

“So-called subprime lenders, which cater to borrowers with bad credit, were the first to see trouble. As American Home Mortgage is showing, even lenders that work with blue-chip borrowers are facing financial problems.”

The Palm Beach Post provided further evidence that the local population growth is slowing (see my post on the population growth myth):

“Providing further proof of the county's housing slowdown, new connections to Palm Beach County's water utilities system have plunged over the last year and a half, according to department figures.”

“New residential and commercial hookups dropped from 497 in January to 164 in July, decreasing precipitously almost every month during that time. The highest number of new connections during the past 18 months was 575 in March 2006.”

“The stunted housing market and water restrictions imposed because of the drought have affected the revenue flowing into the county's water utility, which services about 475,000 residents, mostly in unincorporated neighborhoods. But the utility, the largest in the county, won't yet consider raising rates to make up the shortfall.”

And, despite all this, Bob Murphy recently wrote the Sun-Sentinel begging for positive real estate news. Of course he included my favorite mantra (“Now is a great time to buy.”). I have a feeling Mr. Murphy is not a fan of this site:

“Don't you think the headlines in your paper should be more positive? Especially on the real estate market. This is the time to buy. It's a buyers market: Very low interest rates and prices are down a bit from a year ago. Negative headlines convince the public of doom and gloom. Isn't there enough of that on the following pages?”

“Please get some ‘good news’ next to the ones of who shot whom and all the ugly news. I'm sure there are ‘good news’ stories out there.”