The Sheer Number Of Florida Foreclosures And What They Mean

For sure these days down in the Sunshine State, understanding that there’s a wide range of Florida foreclosures and what they mean for the state’s real estate market can come in handy for those considering getting into or even out of this most diverse of property markets. Over the last couple of years, the downward swing in property values nationwide has impacted Florida just as seriously as it’s impacted most any other state, for one.

Unfortunately, this downward swing has taken the measure of many a homeowner or property investment maven (sometimes known in the trade as a flipper) and found them wanting. People got into properties with little or no money down, on just “stated income” or “no doc” loans (these are particularly ripe for loan fraud, in many cases), all with the expectation that they’d be able to get out of the loan in a couple of years and with a nice profit.

However, around 2007 and then moving into late 2008, a steep decline across the country in home values begin to really grow strong. This was just as applicable for Florida — where a $300,000 home would be eagerly snapped up by many a buyer — as it was anywhere else. And with home values declining by up to half, there are now many home owners in the state owing far more than what the home can fetch on the market.

Being underwater means that the appraised value (which can be different from the market value or at least the amount owed on the mortgage that was given to the bank) of the home is most likely significantly less than what the home would fetch from a ready, willing and able buyer. Many of these homes also ended up with a home equity line of credit (HELOC) or two added to them, as well.

In the go-go days of the real estate boom in Florida (which has always been a very interesting property market even in good times), this wouldn’t have normally been an issue. With home values increasing by 20 to 40 percent every year in some areas, a home buyer could get into an obviously overpriced home and then out of it the following year with a frequently-significant profit in hand, after paying off a HELOC or other attached loan.

Back then, it was good that they were able to do that because the prices that they had paid for the homes and the payments they were agreeing to make would have slammed them hard once those payments adjusted upwards. Getting out before interest rates were readjusted left them looking good and with a tidy profit in hand because there were tons of buyers out there for those homes.

Much of that activity nowadays, though, has pretty much dried up, leaving Florida foreclosures as the natural consequence of a deep dive that much of the country’s real estate market has been involved in for at least 18 months. In Florida, home values have dropped by up to 50%, leaving a possibility that a smart investor can get into a ready-made supply of homes, sit on them for a while, and then make nice money once values begin to rise.

You can take advantage of the great opportunities available when you look at FL foreclosures today! You can find a FL foreclosure that will give you the unique home you are looking for now!