Southern Florida, California Markets Look Vulnerable
Foreclosures in the sunniest spots in the country - South Florida and South California - are rising rapidly with no slowdown in sight, according to real estate research firm for foreclosure properties Default Research.
Default Research's studies show that the number of foreclosures has been rising in South Florida since January 2006, with Broward County, where foreclosures are up 50%, leading the other key counties.
"People who have been reading our market research analyses know that increased foreclosure activity has been a common trend in South Florida over the last year - unfortunately Broward County has been the hardest hit," said Serdar Bankaci, president and CEO of the Mt. Pleasant, Pa.-based Default Research.
Broward leads South Florida with the most foreclosure activity, but Palm Beach and Miami-Dade are not far behind. Palm Beach is second with 37% and Miami is a close third at 30%. According to data obtained by Default Research, the double-digit increases that started back in May of 2005 do not show any signs of cooling off anytime soon.
"Investors are shying away from the Eastern coast and focusing on the Gulf coast, which has seen significant decreases in 2006," added Mr. Bankaci.
In addition to South Florida, the number of foreclosures escalated throughout Southern California, with a rise of 29.09% since January 2006. While Riverside had the highest increase of 56.45%, San Diego County had an increase of 49%, followed by Los Angeles up 16.2%.
"Just as we reported back in March, the real estate bubble continues to deflate in Southern California, this is not surprising at all because home prices are leveling off," said Mr. Bankaci.
The houses that were most affected by the foreclosures in Southern California were single family homes which made up 76% of the activity, 12% were condominiums, and 4% were duplexes and triplexes. According to Mr. Bankaci, Southern California was one of the "hottest" markets in the country, but these types of markets tend to fluctuate, as they are also the most volatile (after all, look at South Florida).
"To add insult to injury, the job growth in May was the lowest it had been since October 2005," he said. "Combine that statistic with the rising interest rates, and you see that the average family suffered financially two times, putting a tremendous strain on families already stretched to the max." (c) 2006 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com http://www.sourcemedia.com