Florida's housing crisis still isn't over

The state now holds a third of the nation's abandoned homes despite rising prices and improving sales.

By Jason Notte Jul 1, 2013 8:07AM
An abandoned house in Arcadia, Fla. (© Richard Clapp/Flickr Vision/Getty Images)The interest rate on a 30-year, fixed-rate mortgage has jumped to 4.46%. And existing home prices have risen more than 12% in the past year, according to the S&P/Case Schiller home price index.


With foreclosure rates down 23% from a year ago and the supply of new and existing homes at a 20-year low, that means the housing crisis is over, right?


Only if your neighborhood isn't still dotted with abandoned homes. Online real estate company RealtyTrac says Florida is littered with such neighborhoods, as the state is now burdened with 55,500 abandoned homes. That's a third of all abandoned homes in the U.S.


Florida became the face of the housing crisis and the ensuing recession as its unsold properties sat fallow and residents soon found themselves with mortgages valued at more than their homes could fetch on the market.


The Huffington Post shares stories of residents in Tampa battling overgrown bamboo and mowing lawns on properties long abandoned but not yet foreclosed upon. The banks that signed off on the mortgages for those abandoned homes are technically responsible for their upkeep, but maintenance is often minimal and corners are cut whenever possible.


Foreclosures still account for 27% of all sales in Tampa and 28% of all homes sold in Miami, according to RealtyTrac. Even though Florida has been luring more buyers to homes that haven't been foreclosed upon through short sales -- which sell homes for less than the mortgages owed and account for 26% of all sales in Florida -- that option is quickly disappearing.


Nationally, short sales fell by 35% in the first quarter from the same period a year ago. Rising home prices are coaxing more owners to hold on to their properties in the hope that they'll get the price they originally paid. Combined with average foreclosure prices rising by 28% during the first three months of 2013, that has made lenders less inclined to enter short sales.


While abandoned homes aren't just Florida's problem -- they represent 20% of all foreclosures in the U.S. -- nine of the 20 metropolitan areas with the most vacant homes in the country are in that state. Even as bank repossessions rose by 11% last month with lenders sprinting to take advantage of rising home prices, it's still tough to argue that the housing crisis has ended for the Sunshine State.


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42Comments
Jul 1, 2013 10:34AM
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Well - Everyone fell for the bailouts in 2007 and 2008.  Wall Street is now OK.  The market axe was coming and the big shots got protection from the Fed and politicians by scaring everyone else.  The slow motion destruction of the housing market and middle class continues.

Jul 1, 2013 11:24AM
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    I sell Real Estate for a living and I am concerned with the "shadow inventory" in my area. Not what it used to be, but a lot of abandoned homes dotting the landscape. What also concerns me is the housing "recovery" has been driven by cheap money. My area jumped 22% in value 1st qtr 2013 over 1st qtr 2102. That big jump concerns me as well as it was largely driven by investors and or speculators.

 

   We are getting close to negative cash flows in rentals at current selling prices as well. At the same time, rental rates are much higher than most home financing but that gap is closing as well. The local employee is most likely working retail or tourism as not much industry is left in these parts.

 

    All looks hunk dory from the surface but I do believe trouble is brewing and we should all proceed with caution...

    .

Jul 1, 2013 1:14PM
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The reason there isn't any real recovery is because  people are still buying houses they can't keep if they lose their job.  All of these MSN Money articles titled "how much house can you afford?" makes people think that they should buy a house at the top of their budget.  The question you need to ask yourself before you buy a house is, if something happens and I am not working due to an accident or an unexpected job loss, what payment amount will I be able to make for an expended period of time?  If you put that time out about three years, will you still be able to afford the house you are looking at?  If the answer is no, you better not buy it.  The next crisis, whether it be student loan debt or when the Feds stop holding interest rates down, could take your job.  I don't feel sorry for people who lose their homes to foreclosure because you have the same information every renter has.  The taxpayers shouldn't be bailing out people who purchase homes they can't afford to keep.  It is up to you to read your paperwork, to buy a home within your means, and to protect yourself from job loss, and injury.  If the worst happens, you need to be able to make those payments.  It is the BANK'S house until you make that last payment, not yours.   
Jul 1, 2013 9:18AM
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What........... I thought everything was hunky dory.
Jul 1, 2013 1:20PM
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In my previous statement, I meant to say that taxpayers shouldn't be bailing out the people whose homes go into foreclosure.  We should stop calling them homeowners.  The bank owns the house, and if you remember that when you are looking at houses, it might make you think twice before you purchase a four bedroom house that you will "grow into."  For a first home, think about a smaller home that fits your needs and one that will be easier to hang on to if the economy takes another nose dive.  Puyt down the biggest down payment you can afford, go for the smallest payment possible, the lowest property taxes, and the lowest homeowners' association fees (if any).  Remember when buying a condo, that your association dues can go up at any time, and you can get a property assessment for thousands of dollars any day after signing your papers and be expected to come up with the money within 60 days.  These assessments can be for roofing, siding, upgrading the grounds, or repairing problems that happened over a long period of time.  Some of the problems the money may be for may not even be related to your unit.
Jul 1, 2013 11:12AM
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I know what we can do!!! We can get together and print some more money !!!Like we haven't done since 5th or 6th grade economics when we were taught you just don't do that.God help this country  please
Jul 1, 2013 1:08PM
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An interesting comment heard on a radio show... the average home rent is $1,100, average mortgage payment is $350. You'd think homes sales would be booming but without JOBS, no one can afford to live anywhere. Both rentals and actual purchases (not Bernanke data) are down.
Jul 1, 2013 2:35PM
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There are a lot of these homes in Florida that were built with contaminated Chinese drywall ! Which made the residents sick . They ended up leaving them to protect the health of their families . I blame the cheap **** companies that imported this poison into our country . Wake up AMERICA  big business is destroying our country by importing all of these contaminated products from China .Construction products, pet food, human food, make up . I could go on and on but you get the picture . Bigger profits for big business no matter what the cost to consumers AKA the American people !!!!!!!!!!!!!!                                            
Jul 1, 2013 2:41PM
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I love how everything is a "crisis" in this country.
Boo Hoo. You took on a mortgage you knew you could not pay for and now you're doing a short sale, which means my taxes get to pick up the slack.

Jul 1, 2013 9:43AM
Jul 1, 2013 2:36PM
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Tear the house down and turn it back into farm land as it has went up 40-50% in the last 3yrs.

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there is something lewd in the control of this housing...... abandoned , sure, .... but someone holds not just the paper, municipalities, state, irs, all seem to sit back and play a waiting game of some weird sort..... When you consider the down trodden, the down and outs, the poor, the working poor, the needy, homeless vets, and not the last or least, the younger generation , who will supply and contribute to the upkeep of the older generations, higher prices and demand seem to be selfish centered.  Is this the American way..... now... it was not the way in the past.....  so ... just maybe could some of the head in the sand onlookers to this debacle , start giving back without carrying the fear of loosing their hip pocket... those onlookers are the bailed out , and just  sit back on their haunches.... in suit and tie land.... 
Jul 1, 2013 5:40PM
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WHAT?! But our govt told us everything would be ok! Things were back to normal! Are you telling me we have been duped?!

Isn't it interesting how things aren't as pretty when we meddle in things instead of letting them take a natural course.

Jul 1, 2013 9:05PM
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one thing more standstoreason... We purchased our home well within our means.  What we did not anticipate was the health insurance through my husbands job going up to over 1180 dollars per month.  Also we had to pay up to 300 dollars per month for co pays on my meds. Plus doctor co pays..  That was our house payment... Our house payment was 900 dollars per month. Then I came down with major health issues including cancer so we had to keep the insurance but we lost our home.  I am now permanently disabled, and hoping that now I have another income coming in and our sons are old enough to work now they will help with purchasing another home with a much lower payment..  Yes our boys plan on living with us until I die, which I hope will be at least another 50 years.
Jul 1, 2013 6:49PM
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I continue to be amazed by people shooting their mouths off about how a problem started or how it can be fixed when it is clear by what they say that they have no understanding of it.  They just repeat what someone else said or what they saw and heard on cable.  I don't know why I bother to even read them, and I guess from now on I will not.  The scary thing is that these people get to vote - hopefully they are in the 35 - 40 percent that don't.
Jul 1, 2013 4:30PM
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This is good news for me seeing how I want to own some vacation property near Walt Disney World in 1 year when I have the cash to put more than 20% down I should be able to get a nice house for a great price.  Fix it up a bit and rent it out when I dont plan to be down there on vacation and make some money.
Jul 1, 2013 1:07PM
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The FEDs could of given a stimulus to it's tax payers, and off set the cost to do so with higher taxes over the course of years so that money would go back into the system. Or, just give everyone across the board a loan modification in order lower the interest rates and or value of the homes. The people did not create the housing bubble, we were victims of it.

Jul 1, 2013 1:04PM
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"What........... I thought everything was hunky dory."

 

What rock do YOU live under? Like clockwork... Florida real estate tanks. It's a God-forsaken place without water, kid. $250,000 condo-tel units can lose 90% of value just like that. The whole center of Florida has no water. You should consider giving up your day-job of being completely useless and a pariah, and take on one of those below Minimum Wage pay positions in elder-care. By the way... it's hurricane season... that's always a big draw for tourism.

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