Five years after the foreclosure peak and seven years after the start of the financial crisis, Florida remains the leader in many prominent foreclosure metrics even after months of substantial declines, according to CoreLogic's June 2015 National Foreclosure Report released this week.
Florida's 12-month sum of completed foreclosures for the period ending June 30, 2015 (101,938) represented nearly one-fifth of the national total for that period (526,189). The state with the second-most, Michigan, had less than half of Florida's total – 46,451. Florida's foreclosure inventory rate for June (2.7 percent) was more than double the national rate (1.2 percent), and the serious delinquency rate in the Sunshine State in June (6.3 percent) was considerably higher than the national rate of 3.5 percent for the month.
Two of the top three metro areas in the category of 12-month sum of completed foreclosures were located in Florida: Tampa-St. Petersburg-Clearwater was first with 16,750 and Orlando-Kissimmiee-Sanford was third with 12,970. Together, those two metro areas accounted for about 5.7 percent of all the nation's completed foreclosures for that 12-month period.
"The housing crash hit Florida particularly hard," CoreLogic Chief Economist Frank Nothaft said. "On average in Florida, home values fell more than 50 percent from the 2006 peak. Even with the appreciation over the past four years, the typical home is still 29 percent below the 2006 peak according to the CoreLogic Home Price Index. In addition, the Florida unemployment rate more than doubled during the Great Recession, rising from 4.9 percent in December 2007 to 11.2 percent in December 2009. These economic forces led to the record level of foreclosures in the state. Because of its large population (as of 2014, Florida is the third most populous state, behind California and Texas), that meant there were a large number of foreclosures. The foreclosure inventory still remains large, in part because of the severity of the foreclosure crisis in the state and in part because of the lengthy judicial foreclosure process."
Despite those elevated foreclosure numbers, the housing market in Florida has been steadily improving. Florida had the largest decline in year-over-year foreclosure inventory rate in June (47.7 percent). By comparison, in June 2014, 5 percent of the residential homes in Florida were in some state of foreclosure. Also, the 12-month some of foreclosures in Florida for the period ending June 30, 2015, represented a 17 percent decline from the 12-month period ending a year earlier on June 30, 2014.
Nationwide, completed foreclosures ticked up by 5 percent in June up to 43,000 for the month; still, they were down by 15 percent from June 2014. Completed foreclosures averaged about 21,000 per month before the crisis, from 2000 to 2006.
"I expect that the number of completed foreclosures will decline on a year-over-year basis, even though some months may have an uptick," Nothaft said. "The expected decline in completed foreclosures reflects the gradually improving housing market conditions and the declining number of loans in foreclosure proceedings."