Elm Street or Main Street: Roy Oppenheim on Foreclosure Nightmare on Main Street
Foreclosures are back… just like Freddy Krueger. Just like in the horror films when things start to calm down and get back to normal… out pops Freddy Krueger again to scare the living daylights out of you.
Well, that seems to be the case here in Florida as it relates to real estate and foreclosures. The news this past week has been that median prices have increased by approximately 22 percent in the past year in South Florida and sales of homes actually also has increased 12 percent from last year.
During the past six months, however, there has been a drastic reduction in the number of foreclosures that have been processed and brought to market due to the fraud-closure crisis that became apparent last fall.
Fast forward to today and we’re seeing the resurgence of the foreclosure crisis. Many of the foreclosure mills have shut down and are being replaced by new firms, many of whom will not process as many cases. Just in the past ten days we have seen an increase in the number of people served in foreclosure and the scuttlebutt is that the process this time around will be faster and more furious.
The unfortunate aspect of all this is just as the real estate market was starting to find its footing, and some even would say slightly rebound, these new foreclosures will either reduce the price of existing real estate or, in fact, bring down prices another 10 or 20 percent. Of course no one knows for sure how buyers will react. Will such additional foreclosures encourage even more buyers to come into the market because they’re getting even a better deal – or will the number of buyers in the market be somewhat fixed or stagnant; increasing supply and reducing the market price of homes?
So it seems that only one thing is now certain – when there is any kind of certainty you can expect to be surprised or to be unnerved.