South Florida still has the sixth highest foreclosure rate of any major metro area in the U.S., even though new foreclosure activity is way down over the last year.
About one in every 87 homes in Miami-Dade, Broward and Palm Beach counties is in foreclosure, according to a report from RealtyTrac that analyzed data from the first six months of 2015.
But the housing market is recovering: over the last year, new foreclosure filings in South Florida fell 30 percent, the biggest improvement in the country.
“We’ve seen this trend for a while now,” said Kwame Donaldson, an economist at Moody’s Analytics. “South Florida is a place where the economic recovery is still happening. I wouldn’t expect foreclosure activity to increase in South Florida for as long as the economy improves.”
Donaldson said that one of the reasons local rates are so high is because in Florida a judge must sign off on each case, slowing down the speed that each foreclosure can move through the system. Many current foreclosure cases are holdovers from the housing crisis. Twenty states use only the court system to handle foreclosures, rather than local sheriffs and trustees.
Michael Pappas, president and CEO of the Keyes Company, a local real estate firm, said that distressed sales held down prices for the market as a whole before the economy improved. But that’s no longer the case.
“The tide of the distress has been going back out to sea,” Pappas said.
“If you’re a buyer, it’s a lot harder to get a good deal on an REO but you still can,” he added.
Existing foreclosures tend to be clustered locally in lower-income neighborhoods where homeowners had the most trouble paying their mortgages during the recession, including Homestead, Opa-Locka and unincorporated areas in the south and west of Miami-Dade.
Nationally, the five metro areas with the highest foreclosure rate were: Atlantic City (one in every 59), Tampa (one in every 82), Lakeland (one in every 83), Jacksonville (one in every 83) and Ocala (one in every 85).
Eight of the top ten cities were in Florida, which was hit particularly hard by the housing crisis. The state still has the highest rate of foreclosure in the country, even though new activity is down 22 percent over the last year.
About 95,000 Florida homes are in foreclosure. That means that nearly one in seven of the nation’s foreclosed homes are located in Florida.