Pace of Southwest Florida Foreclosed Homes Slows Down

While the number of foreclosure filings in Florida soared by 50 percent in May compared to May 2008, the pace of foreclosed homes in Florida slowed down.

Foreclosure filings in Sarasota County fell by 7 percent compared to May 2008 and fell by 16 percent compared to April 2009.

In Manatee County, filings declined by 2 percent compared to May 2008 and fell by 44 percent compared to April 2009.

Charlotte County however had an upward direction, with foreclosure filings increasing by 16 percent compared to both May 2008 and May 2009. But the increase rate was still much below the statewide increase rate.

The mixed results were explained by Sean Snaith, economist with University of Central Florida, as a sign of an impending economic turnaround.

Snaith explained that as the market approaches a turning point in the business cycle, it hovers between expansion and recession and between the positive and the negative.

He further explained that most of the foreclosed homes that arose from speculation, flipping and subprime lending have been processed through the housing market.

What Snaith fears however are the effects of the continued rise in the joblessness rates on the pace of foreclosures. He said that the rising number of unemployed workers, who took out prime loans and who were otherwise capable of paying their mortgage loans, will push up the numbers of foreclosed homes.

In the first months of 2009, the pace of foreclosed homes in Southwest Florida seemed to be slowing down.

But the April data showed a reversal of direction, with foreclosure filings increasing by 40 percent from March data to a tri-county total of 3,101 filings.

Last month, another reversal occurred, with foreclosure filings declining by 25 percent compared to April.

The foreclosure rate decline is an affirmation of the reported recovery in home prices in April. According to the Florida Association of Realtors, home prices in the Sarasota and Bradenton area increased by 9.5 percent compared to March.

The median home price increased to $164,300, an estimated $20,000 increase from the median in the first months of the year.

Nevertheless, Lewis Goodkin, president of Miami firm Goodkin Consulting, warned against excessive optimism. He explained that unemployment and other effects of the recession will push up the numbers of foreclosed homes.