By: Kimberly Miller | Palm Beach Post
Florida ranked first in foreclosure activity for the fifth consecutive month in January as new mortgage defaults and foreclosure auctions skyrocketed in Palm Beach County.
New foreclosures in the county filings were up 64 percent in January from December and saw an increase of 60 percent compared to the same time last year. Notices that a home was going to a foreclosure sale increased a whopping 105 percent from December and jumped 50 percent from last year.
Florida’s dubious distinction as the top-ranked state is partly because of new legislation in California that slowed down foreclosures there after banks were required to follow specific rules or face fines, according to RealtyTrac, which released its January foreclosure report today.
For the first time since 2007, California also relinquished its title as the state with the highest number of properties with foreclosure filings, ceding the designation to Florida. Last month, Florida had 29,800 homes that either entered foreclosure for the first time, received a notice of foreclosure sale or were repossessed by the bank.
Nationwide, South Florida ranked second for the highest number of foreclosures of major metropolitan areas. Ocala ranked first, with Orlando at No. 3.
Another month at the top of the foreclosure list seems to belie the consistent news of increasing home sale prices and dwindling inventory.
But Jack McCabe, chief executive of McCabe Research & Consulting in Deerfield Beach, said the backlog of foreclosures in Florida has yet to be released and that prices will likely dip before the market rights itself.
“Until these distressed properties are resolved, our market is not going to get healthier, and we have a couple of years left to go,” McCabe said. “I’d make a case that Florida, in this downturn, will be the first in and the last out.”
Part of the spike in January filings occurred because banks are catching up after moratoriums they put on foreclosures during the holidays, said Daren Blomquist, RealtyTrac vice president.
“Notices of foreclosure sale hit a 15-month high in Florida,” Blomquist said. “There is definitely something going on here that I think is an indication that a lot of properties we saw go into foreclosure in 2012 are being pushed through to the next step.”
Statewide, notices that a home was headed for a foreclosure auction were up 60 percent from December and 88 percent from last year.
In contrast to RealtyTrac’s foreclosure data for the county, a report from the Palm Beach County Clerk of Court & Comptroller, released Wednesday, showed a 12 percent increase in new filings from December and a 7 percent jump from last year. RealtyTrac’s totals may differ on a month-to-month basis from the clerk’s office because of when the data is collected.
The courts have been churning through foreclosure cases in Florida with help from a one-time stipend of $4 million to hire additional senior judges and case managers.
Between July and December, 105,020 foreclosures have been cleared from the court system statewide, including 8,403 in Palm Beach County. But new cases are being filed nearly as fast as they’re being cleared. During the same time period, 98,432 new foreclosures entered the system, according to the Office of the State Courts Administrator.
As of Dec. 31, there were still 371,119 pending foreclosures in Florida’s courts. Palm Beach County had 31,678 pending cases.
Loan modifications and principal reductions spurred by the $25 billion nationwide mortgage settlement should keep some foreclosures from hitting the market, McCabe said, but it won’t be enough to keep distressed homes from affecting sale prices.
“I don’t think prices will plummet, but I believe the median price for both single-family and condos will go down over the next three years,” he said. “Those saying the market is getting healthier generally have a vested interest for creating that impression.”
Single-family home prices in Palm Beach County increased about 10 percent in 2012 from the previous year to a median of $212,000. Condominium and townhome sale prices were up 13 percent last year to $88,000, according to the Realtors Association of the Palm Beaches.