Florida’s Huge Foreclose Rate Grows as National Rate Jumps 7%

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The foreclosure rate nationwide moved higher by 7% in August, but several states, led by Florida, had the worst of it.

According to one of the nation’s top real estate research firms:

RealtyTrac released its U.S. Foreclosure Market Report for August 2014, which shows foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 116,913 U.S. properties in August, an increase of 7 percent from the previous month but still down 9 percent from a year ago — the smallest decrease in the last 47 consecutive months of year-over-year declines in U.S. foreclosure activity.

The increase in the number of foreclosure auctions reached a multiyear high:

A total of 51,192 U.S. properties were scheduled for foreclosure auction during the month, down 1 percent from the previous month but up 1 percent from a year ago — the first annual increase in scheduled foreclosure auctions following 44 consecutive months of annual decreases. Scheduled foreclosure auctions in judicial foreclosure states where foreclosures are processed through the court system increased 5 percent from a year ago.

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Based on foreclosure activity in several states, the real estate markets in these areas are still deeply troubled, and they are nowhere near the U.S. average. Many of these states suffered the largest declines in real estate values when the housing bubble burst:

A total of 6,468 Florida properties started the foreclosure process in August, a 74 percent jump from the previous month and up 24 percent from a year ago, the first year-over-year increase in foreclosure starts after 17 consecutive months of year-over-year decreases. The rise in foreclosure starts helped Florida post the nation’s highest state foreclosure rate for the 11th consecutive month. One in every 400 Florida housing units had a foreclosure filing in August, nearly three times the national average.

The Nevada foreclosure rate of one in every 524 housing units with a foreclosure filing ranked second highest among the states, up from a No. 3 ranking in the previous month thanks to a 36 percent month-over-month increase in foreclosure starts, bringing monthly foreclosure starts to the highest level since October 2013.

Maryland foreclosure starts in August increased 71 percent from the previous month and were up 20 percent from a year ago, helping that state’s foreclosure rate — one in every 532 housing units with a foreclosure filing — rank third highest in the nation.

New Jersey foreclosure starts in August increased 115 percent from a year ago to the highest level since January 2014, and scheduled foreclosure auctions increased 71 percent from a year ago to the highest level since July 2010, giving New Jersey the nation’s fourth highest state foreclosure rate: one in every 553 housing units with a foreclosure filing.

Georgia REO activity increased 196 percent from the previous month and was up 146 percent from a year ago to the highest level since August 2012, boosting the state’s foreclosure rate to fifth highest nationwide in August, up from 12th highest in July. One in every 582 Georgia housing units had a foreclosure filing during the month.

Other states with foreclosure rates among the nation’s 10 highest in August were Delaware at No. 6 (one in every 746 housing units with a foreclosure filing); Ohio at No. 7 (one in every 840 housing units); Illinois at No. 8 (one in every 842 housing units); Indiana at No. 9 (one in every 893 housing units); and South Carolina at No. 10 (one in every 949 housing units).

The same holds true in many metro areas that were also battered by the drop in home values.

With one in every 154 housing units with a foreclosure filing in August, Macon, Ga., posted the highest foreclosure rates among metropolitan statistical areas with a population of 200,000 or more. Macon foreclosure activity in August increased from a year ago following 18 consecutive months of year-over-year declines.

Foreclosure activity in Atlantic City, N.J., increased on a year-over-year basis in August for the 28th time in the last 30 months, helping the metro area’s foreclosure rate rank second highest nationwide. One in every 292 housing units in Atlantic City had a foreclosure filing in August, nearly four times the national average.

One in every 294 Orlando housing units had a foreclosure filing in August, the nation’s third highest metro foreclosure rate. Orlando foreclosure activity increased 33 percent from a year ago, and all three stages of foreclosure saw increases from a year ago: foreclosure starts increased 18 percent, scheduled auctions increased 63 percent, and REOs increased 15 percent to the highest level since January 2013.

The remaining seven metro areas with foreclosure rates in the top 10 highest were all in Florida: Jacksonville at No. 4 (one in every 300 housing units with a foreclosure filing); Miami at No. 5 (one in every 359 housing units); Palm Bay-Melbourne-Titusville at No. 6 (one in every 368 housing units); Tampa at No. 7 (one in every 407 housing units); Pensacola at No. 8 (one in every 426 housing units); Cape Coral-Fort Myers at No. 9 (one in every 430 housing units); and Lakeland at No. 10 (one in every 441 housing units).

Foreclosure activity increased from a year ago in eight of the markets with top 10 highest foreclosure rates. The only markets with decreases in foreclosure activity from a year ago were Miami (down 10 percent), and Tampa (down 14 percent).

According to the analysis, the housing markets in eight Florida cities may not recover for years. Put another way, all real estate markets are local, and national averages are misleading.

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