Headlines – Week of September 12, 2010
September 25, 2010
States with Highest Foreign Buyers
A recent article in US Today lists Florida as state which attracts the largest share of U.S. home purchases by foreign buyers in 2009.
The top states according the National Association of Realtors are:
Florida – 23%
California – 13%
Texas – 11%
Arizona – 7%
According to the realtors surveyed, Arizona is attractive due to the weather but also since there is little risk of natural disasters.
California was good weather but earthquakes are a continuing threat.
While Florida has hurricanes which have increased homeowners’’ insurance, the state has a long coastline with plenty of water and great golf courses. The state continues to get many buyers from Canada as well as Latin America.
Where is the shadow inventory?
For more than a year everyone has been waiting for the so-called “shadow inventory” of residential real estate to appear and flood the market. So where is it?
According to a recent article in the Wall Street Journal, this is what is happening:
• Some delinquencies have been resolved through loan modifications or people working out the problems on their own.
• Banks are getting better at managing short sales.
• Investors are aggressively buying up properties, sometimes in bulk, directly from the banks or at courthouse auctions so they don’t hit the market.
However, time is running out for lenders. The likeliest outcome is a steady flow of foreclosures over a long timeframe that will prevent another crash in home prices. This scenario however will lead to low or no appreciation in home prices for an extended period of time.
Foreclosures down, but Fla. second nationally
According to the RealtyTrac, foreclosures in Florida fell in August for the fifth straight month, but the state still ranks among those with the highest foreclosure rates in the nation.
Florida ranked second behind Nevada in the percentage of housing units receiving foreclosure notices during the month, with one in every 155 homes receiving one, more than twice the national average.
Two Florida metropolitan areas – Cape Coral/Fort Myers (third) and Miami-Fort Lauderdale-Pompano Beach (fifth) ranked among the top 10 metro areas around the country in terms of the frequency of foreclosures for the month.
Nationally, default notices, auctions and bank repossessions fell 5% from August 2009 but were 4% higher than in July, a figure attributed to a convergence of factors including stepped-up bank repossessions and fewer initial default notices.
Many states, including Florida, have enacted laws or made voluntary arrangements with lenders to extend the period before which mortgage loans become delinquent in an effort to give homeowners as much help as possible to keep their properties. Sluggish home prices and a glut of inventory on the market, however, continues to put pressure on some mortgage holders who find themselves “upside down,” paying mortgages on property worth significantly less than what they paid for it.
Nationally, Nevada continued to lead all states in the percentage of homes in some state of foreclosure proceedings. One in every 84 housing units in Nevada received a foreclosure notice in August, more than four times the national average. August marked the 44th straight month Nevada held the dubious position, despite a 25% drop in foreclosure activity compared to August 2009.
Arizona, California and Idaho rounded out the top five states in the percentage of homes in foreclosure. In terms of sheer numbers, California led the national with 69,143 properties receiving a notice in August. In Florida, 56,877 homes received notices during the same period.
In all, five states, California, Florida, Michigan, Illinois and Arizona accounted for more than half of the 338,836 homes in the U.S. to fall into default.
Posted by Scott R. Lodde