Direction of Local Real Estate Market Difficult to get a Firm Handle On
For the second month in a row we have seen actual foreclosure numbers retreat in Palm Beach County from the higher numbers we had been experiencing since October of last year. It is widely believed that foreclosure numbers during 2011 where lower than should have been due to the “robo-signing” debacle that clogged the system up. Projections have been for higher numbers this year but so far in Palm Beach County that has not been the case but the times they may be changing.
The chart above shows you the six-month trend of foreclosures in Palm Beach County which accurately reflects the trend over the past 180 days. After hitting a multi-year weekly low during the week of February 6th, foreclosure numbers have now increased for the 5th time in 6 weeks and this week we hit an eight week high. A total of 212 properties were foreclosed upon which was ahead of the 190 we had last week and almost in perfect alignment with the 6-month average which currently sits at 210. Even with that increase we stayed far below the 356 foreclosures we had last year before all the paper signing questions were raised.
We continue to see third party bidders doing quite well at these auctions and for the 15th time in 17 weeks their success rate exceeded 15%; this week winning 16.04% of all auctions. Investors continue to flood the market in waves and that trend is one bound to continue. There main problem is landing deals and prices on investment grade properties continue to increase. Just this week 2 foreclosed properties my clients participated in drew 10 and 16 bidders respectively and a selling price far above list price. Cash on cash returns remain very solid and with an inflationary period seemingly looming those purchasing at today’s prices should be handsomely and left wondering why they did not buy more.
No doubt the biggest news that will affect future foreclosure numbers both here and across the country is the recent $25,000,000,000 (yes 25 BILLION) settlement that the banks reached with our representatives in Washington. This agreement now provides a much needed “clean slate” that should once again clear the way for banks to push forward foreclosures which should bring us higher numbers as we get deeper into 2012.
We will keep watching and watch for our update Sunday on interest rates that have spiked significantly this week raising some concern.