While realtors are often criticized for being too optimistic about the housing market, there were challenges that dimmed the otherwise rosy 2013 forecast. Another recession looms if the fiscal cliff isn’t dealt with, and continued tight lending standards will stifle sales, especially to firsttime homebuyers. If the mortgage debt forgiveness act isn’t renewed, people may choose a lengthy foreclosure over a short sale that will require them to count the forgiven debt as income on their taxes. 2013 will be better than 2012 with perhaps some wild cards out there.
Florida saw a 20 percent increase in overall foreclosure activity from last year with the number of homes entering foreclosure jumping 7 percent. In Palm Beach County, new filings were up just .25 percent from last year. According to Palm Beach County Clerk, Florida also had seven of the top 10 metropolitan regions nationally with the highest foreclosure activity, including P a l m B a y , O c a l a , Jacksonville, South Florida, which includes Palm Beach County, Sarasota, Port St. Lucie and Gainesville.
Foreclosure activity is tied with home prices because an increase in distressed homes on the market can push down prices. That’s one of Florida’s biggest unknowns — the large so-called shadow inventory that includes hundreds of thousands of foreclosures in the court system and an unknown number held by lenders that haven’t been put on the market yet. Fannie Mae closely monitors its foreclosure inventory, and is careful not to dump too many distressed homes at once so as not to crash prices. Fannie Mae has about 1.2 million loans in Florida, of which an estimated 167,000 are delinquent. Florida realtors said foreclosures and a recovering market aren’t mutually exclusive. With inventory statewide at just 5.2 months, even prices on foreclosed homes are going up. In October, the average bankowned home in Florida sold for $95,100, up from $84,350 from the same time in 2011. The days of buying a foreclosure for pennies on the dollar are over.
