According to the Sun Sentinel, the value of Broward County property dropped by more than 5 percent in the past year, one of the largest dips ever recorded and a dramatic reversal after years of double-digit gains, according to a county estimate used to set property taxes.
Preliminary figures released Thursday by Property Appraiser Lori Parrish peg the total tax value of all property in Broward at $166 billion, down about $10 billion from a year ago. The number includes the $50,000 tax exemption on residential property mandated by Amendment One, which voters approved earlier this year.
Parrish warned residents — and municipal number-crunchers — to brace for a far greater drop next year, when foreclosures and reduced real estate prices will take full effect.
Setting appraisal rates was more challenging this year because so few houses are selling, Parrish said. The assessments are done on the neighborhood level, based on home sales the prior year.
Often, entire neighborhoods had no sales, making comparisons difficult. If a neighborhood had none, Parrish's office found an analogous neighborhood, based on historical statistics, and used sales information there, she said.
Based on current figures, Parrish expects the downward trend to continue for the next 18 months. The good news is prices are starting to reach more reasonable levels, she said.
"The sales were so overinflated because of the feeding frenzy of 2005, now we're seeing things start to shake out," Parrish said. "Prices are getting back to about where they should be. Buyers are out there, they just don't want to jump in until they're sure prices have stopped dropping."
Source: John Holland and Juan Ortega | South Florida Sun-Sentinel
Saturday, May 31, 2008
Saturday, May 24, 2008
Fort Lauderdale Foreclosures Triple in April
Florida has been hit harder than most states in the country with foreclosures. Broward county is one of the leading counties in Florida in this area.
The foreclosures in Broward tripled this April from the same time last year. In April of 2007 there were 1385 foreclosure actions filed. This April, the court reported that 4124 foreclosure actions filed.
Miami Dade county to the south and Palm Beach county to the north were reporting similar increases.
With all these foreclosures, the real estate market is being flooded with inventory that is driving down real estate prices by the week. According to one Realtor, "50 to 75 per cent of the houses I show are short sales or foreclosures." "These type of properties are in low end housing developments as well as million dollar neighborhoods as well," he added.
There doesn't seem to be any end in sight with foreclosures in South Florida. We have another 18-36 months with these kind of foreclosure numbers ahead of us.
The foreclosures in Broward tripled this April from the same time last year. In April of 2007 there were 1385 foreclosure actions filed. This April, the court reported that 4124 foreclosure actions filed.
Miami Dade county to the south and Palm Beach county to the north were reporting similar increases.
With all these foreclosures, the real estate market is being flooded with inventory that is driving down real estate prices by the week. According to one Realtor, "50 to 75 per cent of the houses I show are short sales or foreclosures." "These type of properties are in low end housing developments as well as million dollar neighborhoods as well," he added.
There doesn't seem to be any end in sight with foreclosures in South Florida. We have another 18-36 months with these kind of foreclosure numbers ahead of us.
Thursday, May 22, 2008
Soaring Foreclosure Numbers Mean More Prey for Vulture Funds
Banks Desperate to Unload Distressed Properties Turn to Private Equity Firms
By NED RANDOLPH
San Diego Business Journal Staff
As more homes fall into foreclosure, banks are packaging pools of foreclosed homes and wholesaling them to private equity “vulture funds” for pennies on the dollar.
While the phrase vulture fund conjures up cold-blooded opportunists, the funds are buying assets that banks are desperately trying to move off their books to free up capital.
Basically, anyone in the market with $3 million to $100 million or more to buy a block of REO, or real estate owned, properties could be called a vulture fund.
National investors such as The Blackstone Group and Lehman Bros. Inc. have reportedly purchased billions of dollars of foreclosed properties through private equity funds.
They haven’t, however, left much of a paper trail for local players who are sorting through the chatter to find legitimate deals, says Lorne Polger, managing partner of San Diego-based Pathfinder Partners LLC.
“We’ve been chasing it for six months. There’s all kinds of fluff on the Internet, but you find that it’s brokers tied to brokers,” said Polger, who says he has access to $400 million in institutional money to buy pools of REO properties.
“Unfortunately, we’ve got the money ready to go, but so far it’s a fruitless endeavor,” he said.
Plenty Of Distressed Properties
In May, foreclosed homes in San Diego County owned by lenders reached 5,463; an additional 3,413 foreclosed homes were scheduled for auction; and 12,320 homes were in default and headed to foreclosure, says Brian Yui, founder of HouseRebate.com in San Diego.
San Diego County auction sales increased by 50 percent from March to April. Statewide, auction sales of foreclosed homes averaged 1,000 a day in April — four times the rate of April 2007, according to Northern California-based ForeclosureRadar.com.
Banks amassing foreclosed properties need help moving them off their books. That’s where vulture funds assist, says Mark Goldman, a lecturer at San Diego State University and residential mortgage broker with San Diego-based Windsor Capital Mortgage Corp.
“(They) have to get that liquidity, which has been a problem in this market. So, many lenders are doing fire sales on their portfolios of mortgages,” said Goldman, whose firm is not considered a vulture fund but has funded more than $20 billion in loans, according to its Web site.
Hedge funds buying up “distressed credit” such as default mortgages attracted $8 billion in the first quarter of 2008, according to Chicago-based Hedge Fund Research Inc.
Local investor Michael Zau has been looking at packages of foreclosed homes in San Diego for months, but says the offers are overpriced.
“There was a firm in San Diego that sold a bulk package for $3 million,” he said. “I saw the package; I was looking at buying it, but I thought it was too expensive.”
The firm was selling the assets for 75 cents on the dollar, Zau says.
“There’s a pretty good chance that if you can buy in bulk, you’ll be able to get a rate of return that is desirable, but you’ve got to find the right property,” he said. “If you’re buying in bulk, it’s harder to do.”
Many properties are bought sight unseen, Zau says.
Buying In Bulk
Broker Michael Byrd with Windsor Capital Mortgage says that he’s seen a lot of pitches for bulk home sales but has yet to see offers that make sense.
“In the six months I was looking, not only was I not able to get a deal done, but I didn’t know anyone else that got a deal done,” said Byrd, who was researching packages between $5 million and $40 million for a potential buyer.
“It’s definitively seen as a big opportunity and attracting a lot of interest and capital,” said Sean O’Toole, founder of ForeclosureRadar.com in the Bay Area.
“When it comes to buying houses, cleaning them up and getting them resold or rented, it’s a lot of work,” O’Toole said. “My guess is we’ll start reading about a lot of failures as well as successes.”
Real Estate Open Networkers
By NED RANDOLPH
San Diego Business Journal Staff
As more homes fall into foreclosure, banks are packaging pools of foreclosed homes and wholesaling them to private equity “vulture funds” for pennies on the dollar.
While the phrase vulture fund conjures up cold-blooded opportunists, the funds are buying assets that banks are desperately trying to move off their books to free up capital.
Basically, anyone in the market with $3 million to $100 million or more to buy a block of REO, or real estate owned, properties could be called a vulture fund.
National investors such as The Blackstone Group and Lehman Bros. Inc. have reportedly purchased billions of dollars of foreclosed properties through private equity funds.
They haven’t, however, left much of a paper trail for local players who are sorting through the chatter to find legitimate deals, says Lorne Polger, managing partner of San Diego-based Pathfinder Partners LLC.
“We’ve been chasing it for six months. There’s all kinds of fluff on the Internet, but you find that it’s brokers tied to brokers,” said Polger, who says he has access to $400 million in institutional money to buy pools of REO properties.
“Unfortunately, we’ve got the money ready to go, but so far it’s a fruitless endeavor,” he said.
Plenty Of Distressed Properties
In May, foreclosed homes in San Diego County owned by lenders reached 5,463; an additional 3,413 foreclosed homes were scheduled for auction; and 12,320 homes were in default and headed to foreclosure, says Brian Yui, founder of HouseRebate.com in San Diego.
San Diego County auction sales increased by 50 percent from March to April. Statewide, auction sales of foreclosed homes averaged 1,000 a day in April — four times the rate of April 2007, according to Northern California-based ForeclosureRadar.com.
Banks amassing foreclosed properties need help moving them off their books. That’s where vulture funds assist, says Mark Goldman, a lecturer at San Diego State University and residential mortgage broker with San Diego-based Windsor Capital Mortgage Corp.
“(They) have to get that liquidity, which has been a problem in this market. So, many lenders are doing fire sales on their portfolios of mortgages,” said Goldman, whose firm is not considered a vulture fund but has funded more than $20 billion in loans, according to its Web site.
Hedge funds buying up “distressed credit” such as default mortgages attracted $8 billion in the first quarter of 2008, according to Chicago-based Hedge Fund Research Inc.
Local investor Michael Zau has been looking at packages of foreclosed homes in San Diego for months, but says the offers are overpriced.
“There was a firm in San Diego that sold a bulk package for $3 million,” he said. “I saw the package; I was looking at buying it, but I thought it was too expensive.”
The firm was selling the assets for 75 cents on the dollar, Zau says.
“There’s a pretty good chance that if you can buy in bulk, you’ll be able to get a rate of return that is desirable, but you’ve got to find the right property,” he said. “If you’re buying in bulk, it’s harder to do.”
Many properties are bought sight unseen, Zau says.
Buying In Bulk
Broker Michael Byrd with Windsor Capital Mortgage says that he’s seen a lot of pitches for bulk home sales but has yet to see offers that make sense.
“In the six months I was looking, not only was I not able to get a deal done, but I didn’t know anyone else that got a deal done,” said Byrd, who was researching packages between $5 million and $40 million for a potential buyer.
“It’s definitively seen as a big opportunity and attracting a lot of interest and capital,” said Sean O’Toole, founder of ForeclosureRadar.com in the Bay Area.
“When it comes to buying houses, cleaning them up and getting them resold or rented, it’s a lot of work,” O’Toole said. “My guess is we’ll start reading about a lot of failures as well as successes.”
Real Estate Open Networkers
Florida still racking up foreclosures in April
Foreclosures are back on the upswing in Florida in month-over-month data, but there is good news. The Sunshine State has been passed by Arizona in the rate of foreclosures, and now has the fourth-highest rate in the country, according to a new report from RealtyTrac.
The Irvine, Calif.-based company said Florida had 35,264 properties in some type of foreclosure in April, up 16.6 percent from March and more than 146 percent from a year ago. That is the second-highest number of total foreclosures in the nation, behind only California, and represents one home in foreclosure for every 242 homes.
Nationwide, foreclosures were up 4 percent from the previous month and 65 percent from April 2007, affecting 243,000 properties. That is the highest number of foreclosures RealtyTrac has counted since it started the report in January 2005.
"Although only about 2 percent of households nationwide are in foreclosure, these properties contribute to already bloated inventories of homes for sale and put downward pressure on home values," RealtyTrac Chief Executive Officer James J. Saccacio said in a release. "Areas of California, Florida, Nevada and Arizona continue to be particularly hard hit. Property taxes are eroding, putting municipal budgets in peril."
Vallejo, Calif., for example, had to file for bankruptcy after reporting the sixth-highest foreclosure rate in the nation, Saccacio said.
Florida and California continue to account for nine of the top 10 metropolitan areas with high foreclosure rates, with Fort Lauderdale at No. 10. Other Florida metro areas listed are Cape Coral-Fort Myers, at No. 5, and Port St. Lucie-Fort Pierce, at No. 9.
Numbers were a bit different from Foreclosures.com, which reported 44,825 households in foreclosure in April, up 2.4 percent over March, and up 22 percent since the beginning of the year. For the first four months of 2008, Florida had 162,316 filings, the most in the nation.
South Florida Business Journal
Real Estate Open Networkers
The Irvine, Calif.-based company said Florida had 35,264 properties in some type of foreclosure in April, up 16.6 percent from March and more than 146 percent from a year ago. That is the second-highest number of total foreclosures in the nation, behind only California, and represents one home in foreclosure for every 242 homes.
Nationwide, foreclosures were up 4 percent from the previous month and 65 percent from April 2007, affecting 243,000 properties. That is the highest number of foreclosures RealtyTrac has counted since it started the report in January 2005.
"Although only about 2 percent of households nationwide are in foreclosure, these properties contribute to already bloated inventories of homes for sale and put downward pressure on home values," RealtyTrac Chief Executive Officer James J. Saccacio said in a release. "Areas of California, Florida, Nevada and Arizona continue to be particularly hard hit. Property taxes are eroding, putting municipal budgets in peril."
Vallejo, Calif., for example, had to file for bankruptcy after reporting the sixth-highest foreclosure rate in the nation, Saccacio said.
Florida and California continue to account for nine of the top 10 metropolitan areas with high foreclosure rates, with Fort Lauderdale at No. 10. Other Florida metro areas listed are Cape Coral-Fort Myers, at No. 5, and Port St. Lucie-Fort Pierce, at No. 9.
Numbers were a bit different from Foreclosures.com, which reported 44,825 households in foreclosure in April, up 2.4 percent over March, and up 22 percent since the beginning of the year. For the first four months of 2008, Florida had 162,316 filings, the most in the nation.
South Florida Business Journal
Real Estate Open Networkers
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