The surge in unemployment nationwide has increased foreclosed property inventories. Although there are increases in home sales in many areas, these positive developments are being crushed by falling home prices, rising numbers of jobless Americans and expectations of another wave of foreclosed property inventories.
Florida real estate analyst Jack McCabe said home prices are not yet bottoming out because foreclosed property lists will still grow in the coming 12 to 18 months.
Optimism has spread recently because of reports of a rising number of first-time homebuyers making home purchases and investors snapping up homes from foreclosed property inventories.
But positive home purchase reports have been weakened by the S&P/Case-Shiller Home Price Index released this week, which showed price declines in the major cities it tracked and posted the biggest drop since the index was launched 21 years ago.
In Miami, the median home price dropped by 39 percent compared to April 2008. Because of record low home prices, sales of single-family homes increased by a record high of 98 percent in April 2009 compared to April last year, according to the Realtor Association of Greater Miami.
Also, homeowners in Miami, among the country’s five poorest cities, have been struggling to find money for their basic needs as jobs get scarcer and scarcer.
Martin Garcia, a 48-year-old resident of Miami, was able to take out a 30-year 9.5-percent loan and was able to make his monthly payment of a little over $800 when he was working as a medical laboratory engineer. But when he was laid off, his monthly jobless benefit of about $900 was no longer enough to support his basic needs and his mortgage payments. He could not refinance his loan because he has no job.
In Florida, the jobless rate is hovering at the 9.6-percent level, a two-fold increase from December 2007 level.
In Lee County, the median price for single-family houses has dropped by over two-thirds from its highest level in December 2005, as job cuts push more houses to foreclosed property lists.
In April 2009, Lee County had a total of 45,150 foreclosure filings, an overwhelming surge from the 20,544 filings in April 2008, according to Fort Myers Mayor Jim Humphrey.
In 2008, Fort Myers-Cape Coral area had the biggest foreclosure rate among metro areas nationwide, with about 12 percent of all housing units hit with a foreclosure or default filing.
Mark Zandi, top economist at Moody’s Economy.com, said unemployment, underemployment and underwater loans are pushing more homes into foreclosed property inventories.
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