South Florida home sales are threatened as banks freeze foreclosures
Another snag has hit the already the troubled housing market throughout the US and particularly in South Florida, including the Boca Raton, Delray Beach, Highland Beach and Boynton Beach real estate markets in which our team specializes.
Because of a myriad of legal and paperwork issues, many banks have halted the sales process of their REO (real estate owned) bank owned properties while the investigation into the improper actions takes place. This is leaving many pending sales in limbo, including several pending contracts that we are working with. More banks are threatening to follow suit and freeze their pipeline of foreclosure sales as well.
Many of our clients are investors, and are willing to wait out this process, but for those families who need a house, buying a foreclosure is currently not an option.
What will this mean for our local market? Considering that approximately a third of the sales in the south Palm Beach County real estate market currently are distress sales, this could be a disaster for us, and prolong the recovery even more.
It’s also a huge problem for neighborhoods, where bank owned homes are usually in disrepair and neglected, often with no electricity (hence an opportunity for mold) and their values will further decline as no one is maintaining the property or paying into the Homeowner’s Association if one exists.
I really hope that this issue gets resolved, and sooner rather than later. I don’t think this is good in the long run for our economy or our housing market. I understand that the paperwork has not always been processed properly, and that needs to be remedied, however I have not heard of cases where someone who is current on their mortgage is losing their house to foreclosure, so we do still need to keep the bigger picture in mind.
What do you think? When will things begin to resemble normal?
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