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2011 to be Funny Year for Property in Florida
January 19, 2011Article by Ray Withers
2011 is likely to be a funny old year for property in Florida. According to reports from sellers of foreclosed properties and realty Trac, the number of foreclosure filings slowed drastically at the end of last year, as banks froze filings after being caught with their pants down, robo-signing and not having the necessary paperwork.
The system is still under intense scrutiny, with the Assistant Attorney General recently testifying to a system that is “severely troubled” in front of a review in the senate. “These investigations began with the robo-signing revelations last fall but have expanded into other apparent irregularities since,” she read from a prepared statement.
“Foreclosures, usually a relatively simple process, have become a virtual morass of faulty affidavits of indebtedness, faulty, late or nonexistent assignments and court rulings that are not favourable to lenders,” she said.
As December foreclosure figures were the lowest in three years, one can only assume that the foreclosure freeze is continuing.
Of course this is good on the one hand; families getting to keep their home and property values not being dragged down quite so quickly, but on the other hand, how can we have a recovery when there is a mounting backlog of homes nearing repossession, leaving price falls looming way to large for many if not most buyers.
Thank fully the news is not all bad according to overseas property investment consultancy Property Frontiers.
“Repossessed properties are not the only way to get a good deal on property in Florida, and we have dozens of properties to prove it,” said David Cox, director of the firm.
“The sheer volume of repossessions in Florida has dragged down prices so far that developers are selling off new build and refurbished developments at rock bottom prices. Sure, these are still under the cloud of further price drops, but with many of them at between 40% and 60% below build replacement cost the really don’t have much further to fall, and we believe the value for money will keep the buyers coming, if only for fear of missing the deal of the century,” he explained.
Of course there is the possibility that, depending on how long the foreclosure freeze continues, prices could even start to be pushed up as supply tightens. However, supply is by no means tight, and it would need to be a good few months before it became so. That said: the senate involvement is likely to drag it out, so such an occurrence is not impossible — time, as always, will tell.