Statewide foreclosure rates for August were the highest in the country, second only to Illinois, according to a report released Friday by the Florida Department of Economic Opportunity Labor Market Statistics Center.
There were 27,422 housing foreclosures in Florida in August, a 7.4% increase over the month and a 16.3% increase over the year, according to the report. This is equivalent to one foreclosure for every 328 units in the state.
Despite these numbers, Chuck Shaffer, a realtor with Palm Coast Real Estate, said he predicts a gradual improvement in the market.
“It seems like in Palm Coast, things have stabilized a bit,” he said. “The perplexing thing is that the average home price isn’t moving much.”
This is problematic because new home construction won’t pick up much until the median selling price of a home is within 5% to 10% of the average cost of building a house, Shaffer said. Otherwise, developers and consumers have little incentive to build.
Currently, new home construction for a four-bedroom, two-bathroom home, including the cost of land, materials, labor and permits, is between $185,000 and $200,000.
That same house would probably only sell for around $145,000, Shaffer said. If the median home price increased, the market would be more enticing for builders, which would, in turn, create more competition and make the housing better for existing properties as well, he said.
The state’s Department of Economic Opportunity reported a statewide median home price of $148,000 in July, down from $151,450 listed in June, but up overall by 7.8% for 2012. In July 2011, the median home price for the state was $137,300.
What pushes this number down, Shaffer said, is foreclosed homes that are sold at auction price.
Currently, less than 25% of the single-family homes currently listed in Palm Coast are distressed homes, which are defined as short sale, real estate-owned or foreclosure properties, Shaffer said. A year and a half ago, that number was around 50%.
While this is good news, there’s still a way to go, Shaffer said. Because distressed homes are sold or listed at such a low cost, even when less than a quarter of properties on the market classify as such, distressed properties push the median home price down.
“The good news is that if the banks don’t flood the market with auction homes, which I don’t think they will, that number will start to go up,” he said.
Florida’s single-family home inventory was at at 100,657 for July, the state’s Department of Economic Opportunity reported. This is down 32.6% for the year and 48.4% since its peak month in September 2010, when inventory reached 195,001. July marks the 48th consecutive month in which these numbers have declined.
And even though average home prices aren’t moving much, they are moving in the right direction, largely because of the diminishing amount of distressed properties that are actually listed for sale on the market, Shaffer said.
“I think the banks are getting a bit smarter,” he said. “They’re not going to flood the market and deteriorate their assets.”
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