Florida Housing Market Continues to Face Uncertainty
The story of Florida’s housing market continues to be one of foreclosures and distressed sales. Authorities expect over one million distressed homes to hit the market over the next year or so, including those subject to delinquent mortgages, bank-owned homes and a backlog of homes from the Robogate scandal. A legal case regarding the scandal is currently before Florida’s Supreme Court. The distressed properties are concentrated in Orlando, Jacksonville, and across South Florida.
This backlog of distressed homes has worried financial professionals and real estate professionals who feared that the expected increase in inventory would cause prices to plunge.
However, despite some continuing foreclosures, bank-owned homes have not hit the market in large numbers. It appears that many, perhaps most foreclosures, are in the past. In fact, prices have increased as some real estate companies have fewer properties available this year than last. This has led to bidding wars in some cities. Of the available homes, surprisingly few are foreclosed homes in Broward County and elsewhere.
The Future of Florida’s Housing Market
Some experts say prices will fall when distressed homes reach the end of the foreclosure process and banks strategically release their stockpile of inventories. Still, with many homes simply tied up in a nearly three-year long foreclosure process, it’s difficult to predict the future of Florida’s residential real estate market. Increasingly, banks are skipping out on the process by negotiating a settlement to modify mortgages or approve a short sale, costing money but saving time in the process.
The slowdown in foreclosures is likely due to the Robogate scandal, in which companies admitted to cutting corners and using false documents in the foreclosure process for thousands of homes. Five mortgage lenders settled a resulting lawsuit with Florida and other states for $25 billion. Meanwhile, the Florida Supreme Court is set to rule on whether the banks can re-file proper paperwork for bad foreclosures. The decision will have significant consequences for real estate prices in the state.
In the meantime, those facing foreclosure should consider all possible alternatives to remain in their homes. Contacting a bankruptcy attorney to discuss all of the legal options available is a good first step.