A second wave of Miami foreclosed homes will occur in 2011, according to housing analysts interviewed by Joy Bryant, director for credit counseling and foreclosure mitigation at Housing Partnership in Florida.
According to analysts, the next wave of foreclosures will be driven by the resetting of option adjustable-rate mortgage loans in 2011.
Despite a slowdown in foreclosure filings in Florida in October, based on a real estate firm that tracks foreclosures nationwide, the pace and number of foreclosure actions in the state were still high. With a foreclosure rate of one in 168, it was third in the chart of state rates, next only to Nevada and California.
Within Florida, the region being battered most by foreclosures is South Florida. In the counties of Miami-Dade, Monroe and Broward, over 90,000 additional foreclosure actions were filed in September.
According to Bill Lazar, director of the Saint Johns Housing Partnership, the number of foreclosed and unsold condo units has also been rising in many counties and all levels of household income are now being affected.
Lazar said that foreclosures in high-end neighborhoods such as Ponte Vedra and Saint Johns have been increasing.
According to Florida analysts, the major reasons for the still high number of Miami foreclosed homes are unemployment, record numbers of risky loans, condo overbuilding, high number of flippers and large number of families who bought big homes they could not afford to pay.
In Florida, 14 percent of risky home loans and 25 percent of delinquent prime mortgage loans were covered by properties not occupied by owners. This indicates that these properties were bought by investors who intended to flip them.
According to the Mortgage Bankers Association, the four states with the highest paces of defaults and foreclosures in the middle months of this year - Nevada, California, Arizona and Florida - also had the highest numbers of foreclosed properties not occupied by owners.
Doug Duncan, a top executive of the Mortgage Brokers Association, said many foreclosed properties in Florida resulted from the loss of investors in the house price gamble.
The unemployment rate has also hit 11 percent in September, much higher than the nationwide rate of 9.8 percent. Miami-Dade County had substantial job losses in its education and medical care sectors. Across the state, more than one million have been out of work as of September.
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