I read a great article in the Bizjournal and thought I would repost it for you guys to read.
Florida has not "even begun to see the end of the foreclosure issue," state Chief Financial Officer Alex Sink warned.
Speaking to a group of 450 business leaders in Orlando on Friday, Sink said most experts believe that foreclosures will continue to rise sharply through August and September.
"This mortgage mess is more sophisticated than anything we've ever seen before," Sink said.
Florida was No. 4 in April foreclosure activity in the U.S., with a nearly 150 percent increase from the same period a year ago. RealtyTrac reported there were 35,264 properties in some state of foreclosure, or one for every 242 properties. April's numbers were nearly 17 percent higher than March and 146 percent greater than April 2007.
However, Sink noted that Florida has seen its share of real estate boom-and-bust cycles. Quoting from Frederick Lewis Allen's "Only Yesterday" -- a history of the 1920s -- Sink noted that, in the 1920s, speculators were buying properties after seeing only blueprints and putting as little as 10 percent down.
She said Florida must continue to reinvent itself by recruiting high-tech, high-paying jobs to the state and building on the state's tourism assets.
"We have to be in Europe and Asia and encouraging people to come to Florida," Sink said. "If we're not, we're not being very smart."
The state must also focus on reforming its hurricane insurance coverage, Sink said, noting that businesses subsidize 40 percent of the state's coverage.
And she encouraged business leaders to stay engaged with local and state governments.
"We need your help to establish priorities in these difficult budget times. We need to hold hands instead of being on opposite sides of table," Sink said.
Heather Joubran, GRI, NRBA, CLHMS, CDPE
RE/MAX Central Realty
www.HeatherTheRealtor.com (407) 810-6304
Specializing in First Time Home Buyers, Short Sales, Bank Owned Real Estate, REO & Foreclosure Properties
Servicing Real Estate Needs in: Lake Mary, Longwood, Winter Springs, Sanford, Altamonte Springs, Oviedo, Orlando, Downtown Orlando, Thornton Park, College Park, Winter Park, Maitland, Windermere, UCF, Lake Nona, Baldwin Park, Apopka, Ocoee & Winter Garden
And every day the new mortgage origination programs get tighter all over the country. The underwriting system is a knee-jerk disaster at the moment and it will be so difficult to get a loan soon, that we will have much more difficulty selling. The next couple of years are going to be interesting. Crawl in your foxhole, identify niche markets that can still be active and control your business costs. The strong will survive!
No disrespect with this comment.
Some people have been using the same generic Speech for months.
The market seems to have "Bottomed" at this level and appears to be heading up based on sales during March and April...
These are documented facts..
I am no sure that I agree with all of the comments in your article some seem out of context. I do agree however that we have not seen the worst as yet. Fortuneately the drop in prices has brought back a large number of buyers who could not previously buy when the marketpeaked.
I think it will get worse in a lot of areas, however, the numbers we are seeing for inventory and sales show improvements and signs that the market has bottomed out in some of the more popular areas like Miami Beach and South Beach and similar areas.
"Sink noted that, in the 1920s, speculators were buying properties after seeing only blueprints and putting as little as 10 percent down."
Seems to me that folks should not be comparing our present market to that of a market established 88 years ago.
You would think that nothing has changed. In 1920, there was no PMI, FHA, VA financing.
Of course, there was no HUD, Fannie Mae, Wall Street Hedge Funds, either.
We are not in the 1920s. Perhaps Mr. Sink could focus on what is and not what was.
Lenn good comment. I agree I think the market is bottoming out and while there might be more foreclosures out there I think the overall real estate is recovering.
The biggest problem I see is public perception. While we definitely have issues as an industry, constantly highlighting those issues only makes them worse. It's a self-fulfilling prophecy. My colleagues and I have decided not to participate in the down market. I'd suggest anyone who wants to survive this should do the same. Let's talk up the positives and get this thing turned around! "Affordability is UP!!"
Heather...
It seems we are at a crossroads here, we either give in to the media or we take a stand and make somethng happen. As agents, I think it is up to us to take charge of the situation!
Heather,
Good Info!
I watch the market fundementals in my market, the Inland Empire of Southern California, and I agree with what you posted. Everything I am looking at is signalling that it will get worse before it gets better, NOS's are at the highest point and Foreclosure cancelations are down to 9%, all this means that 90% of the NOD's will become foreclosures in 120 days. I suspect that between September and Fabruary we will see the largest number of foreclosures.
Take care!
RJH
I agree - the worst IS yet to come.
We're seeing ONE IN FIVE HOMES IN PALM BEACH COUNTY in foreclosure/pre-foreclosure. You won't convince me that this wasn't contrived by the Federal Reserve as 'THE GREAT AMERICAN LAND SNATCH".
I think this new House Bill 643 that just got signed into law is going to further perpetuate the foreclosure market. Instead of investors and Realtors wanting to fool with short sales, this law is going to frighten them away and just send more properties to the courthouse steps. Time to start applying to do REO work.
I'm glad to see so much optimism but it seems clear that the worst is yet to come. The economy is getting worse and EVERYTHING is going up. It will become very difficult to purchase a home as these fundamentals in the economy evolve. There are more homes that will be getting in trouble in the months to come whether it's because the loans are resetting or the after effects of an economy is recession. Unfortunately, I believe the panic setting in will cause the market to go lower than anyone could think was possible before rebounding.
As far as the 1920's. We must learn from our history. This problem that we're going through is the same fundamental problem that caused the S&L crisis in the 80's and the Dot.com crash in the late 90's. We apparently didn't learn from those moments in our history. Yes, it was 88 years ago but it seems everything comes back.
The state needs to allow a free market for insurance in Florida... They have really made a huge mess of the situation and Citizens Insurance is not the answer.
You are in our prayers! Keep your chin up!!