Florida Bankruptcy Filings & Mortgage Delinquencies 2nd Quarter 2009

 Florida

18,328,340 Population (2008)
25,415 Bankruptcy Filings Q2 2009
1.39 Filings per 1,000 Population
22.8% Percent Mortgage Loans Delinquent or in Foreclosure Process

Economy: The Good, the Bad, the Ugly

Housing prices rose 2.9 percent from the first quarter to the second – the first quarterly increase in three years, Standard & Poor’s reported Tuesday. Meanwhile, a business group announced Tuesday that amid signs of economic improvement, consumer confidence rebounded this month.

The S&P/Case-Shiller Home Price Index and the Conference Board’s consumer confidence index were the latest reports to suggest that the U.S. economy is staggering toward recovery. The progress is agonizing, and many ordinary people won’t see the payoff for a while.

The Congressional Budget Office expects unemployment to rise from July’s 9.4 percent and average double digits next year.

Long climb ahead

Even so, the economy is a long, long way from a full recovery. The Congressional Budget Office predicts economic output will fall 1 percent this year and unemployment will average 10.2 percent in 2010. Housing prices are still down 30 percent from their 2006 peak, household incomes are shrinking, employers are still cutting jobs and consumer confidence is struggling back from rock-bottom levels.

Unemployment fell unexpectedly last month, though partly because many discouraged workers stopped looking for jobs.

Industrial production rose in July for the first time in nine months.

Home prices rose in 18 of the 20 cities tracked by the S&P/Case-Shiller index from May to June. Month-to-month comparisons can be unreliable and overall prices are about where they were in early 2003. Still, “The numbers are telling us prices may have already hit bottom,” says Patrick Newport, economist at IHS Global Insight.

That helps by producing:

• More consumer spending. Rising home prices give homeowners more confidence to spend. They tend to tighten their belts if they owe the bank more than their house is worth.

• More buyers moving into the housing market. Rising prices may nudge more potential homebuyers off the fence.

• Fewer toxic assets on the books for banks. Rising home prices are an elixir for banks stricken with questionable mortgage loans and foreclosed property. “It improves the balance sheet of the bank. That will hasten the end of the credit crunch,” says Joel Naroff, of Naroff Economic Advisors. “Do I think it will happen very fast? No.”

Worries about winter

Moody’s expects the housing market to be depressed this winter when banks auction off foreclosed property. Lenders have delayed the sales, while trying to figure out how to qualify for a government program to modify troubled mortgages; eventually, the foreclosures will continue.

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Florida’s existing home, condo sales up in July

Florida’s existing home sales rose in July – the 11th month in a row that sales activity increased in the year-to-year comparison, according to the latest housing data released by the Florida Association of Realtors® (FAR). Statewide existing home sales in July also rose over the previous month’s sales level.

Existing home sales rose 37 percent last month with a total of 15,882 homes sold statewide compared to 11,595 homes sold in July 2008, according to FAR. Statewide existing home sales in July increased 0.2 percent over June’s statewide activity. Florida Realtors also reported a 48 percent rise in statewide sales of existing condos in July.

Florida’s median sales price for existing homes last month was $147,600; a year ago, it was $193,800 for a 24 percent decrease.

The national median sales price for existing single-family homes in June 2009 was $181,600, down 15 percent from a year earlier.

Several positive market factors are influencing the housing sector. Historically low mortgage interest rates, affordable home prices and a large selection are encouraging buyers who’ve been on the sidelines. Activity has been consistently much stronger for lower priced homes. We expect a gradual uptrend in sales to continue due to tax credit incentives and historically high affordability conditions.

In Florida’s year-to-year comparison for condos, 5,035 units sold statewide compared to 3,396 units in July 2008 for a 48 percent increase. The statewide existing condo median sales price last month was $108,300; in July 2008 it was $168,700 for a 36 percent decrease. The national median existing condo price was $183,300 in June 2009, according to NAR.

Interest rates for a 30-year fixed-rate mortgage averaged 5.22 percent last month, down significantly from the average rate of 6.43 percent in July 2008, according to Freddie Mac.

Senator Edward Kennedy Dies

Florida Delinquencies & Foreclosures - Scary #s

“Nearly 23 percent of residential loans in Florida were delinquent or in foreclosure in the second quarter, according to a survey by the Mortgage Bankers Association. Florida has the highest rate in the nation, followed by Nevada, Arizona and Michigan.”

Keys Homes are selling, but for less

Echoing trends around the region and throughout much of the nation, area real estate sales were up in the second quarter compared to the same period last year, though prices continued to decline.

From April 1 to June 30 there were 249 residential sales between Key West and Mile Marker 107 in Key Largo, up 20 percent from the last year. But the average home price dropped 24 percent, from $640,000 to $483,000.

Total Keys real estate sales, including commercial properties and boat slips, trended similarly during the second quarter. From Key Largo to Key West, 396 properties were sold in April, May and June, 11 percent more than last year. The increase was the first since the market peaked in 2005, but it came along with a 23 percent decline in the average sales price, to $480,000.

The news wasn't quite as good in Key West, where total home sales fell 5 percent in the second quarter of this year compared to 2008. However, that represents only six fewer home sales in the second quarter of 2009, dropping to 121 from 127 last year during the same three-month period.

The average sales price in Key West dropped 20 percent, from $651,000 to $519,000.

The majority of sales in Key West -- 73 percent -- have occurred on homes priced at $499,000 and under. Another 15 percent occurred among homes prices from $500,000 to $999,000. The other 12 percent was for homes prices $1 million and up, which accounted for 15 home sales.

Upper Keys residential prices remained higher over the spring than other parts of Monroe County.

The average residential sales price from April through June was $562,000, which is $82,000 more than the county as a whole, but off 21 percent from last year, according to the American Caribbean analysis.

The number of Upper Keys residential sales -- Ocean Reef not included -- increased from 90 to 109, with the gains spread across various types of properties, from open-water homes and dry lots to condos and mobile homes.

The average price of the 26 condos that sold, however, decreased 29 percent, from $526,000 to $373,000.

Drops in housing prices, and increases in the homes sold, extend beyond the Keys into the rest of Florida and much of the country. Nationwide, home sales were up 3.8 percent in the second quarter when compared to the first quarter of this year, according to the National Association of Realtors.

In Florida existing homes sales in June were up 28 percent over last year while prices dropped 28 percent. In addition to low prices, friendly interest rates and tax incentives have fueled demand, leading many economists to be optimistic that, though distressed home and foreclosure rates remain high, the housing market is beginning to right itself.

In the Keys, the inventory of properties offered for sale was down 21 percent during the first half of 2008, a positive sign for a market that's been oversaturated with supply. The backlog of properties stood at 34 months, the lowest since 2006 but still way above the three to 10 months that presided from 2002 through much of 2005.

The Keys market is on a slow but steady course to recovery, but is still burdened by foreclosures and short sales as well as the tight lending market. Price stabilization is 18 to 24 months away given the current market and economic factors at play.