Fort Lauderdale Foreclosure Homes Drove Biggest Discount

by Donald Hanz on cities

Fort Lauderdale foreclosure homes continue to cut down home prices and push more sales in the area in 2010, based on reports from research firms.

In a study of house prices in 27 large metro areas, the Fort Lauderdale-Miami-Palm Beach area posted the biggest home price reduction rate in February this year. In the Fort Lauderdale area, homes were sold with a price discount of 14.89 percent from the asking price.

Next to the Fort Lauderdale area were Orlando, with a price discount rate of 13.16 percent, and Las Vegas, with a price discount of 12.05 percent. Lenders have been cutting down their foreclosed property sale prices to attract bidders in the hope of sparking a buying competition or to attract investors to buy in bulk.

Based on data from an online real estate firm, the average price for homes in Fort Lauderdale in January this year was $178,313, down from the average price in the preceding month. The price fell further in the first week of March to $173,601.

The surging number of Fort Lauderdale foreclosure homes put the Fort Lauderdale-Miami area to tenth-place last year in terms of foreclosure activity in 203 of the largest metropolitan areas in the nation. The whopping 172,894 default notices and foreclosure petitions in 2009 marked a jump of 44 percent from the pace of foreclosure activity in 2008 and represented more than 7 percent of all households in the area.

Compared to the pace of Florida foreclosures in 2009, total filings in the Fort Lauderdale area represented 33.46 percent of all total filings statewide or more than one-third of statewide foreclosure activity.

Because of these high rates of foreclosure activity and the consequent record rates of price declines, a significant number of homeowners in the area have been considering bailing out of their mortgages by simply abandoning their loans and their homes.

In Broward County, where Fort Lauderdale is located, more than 50 percent of all mortgaged houses are currently appraised far below their loan amounts. Most of these homes were bought during the heydays in 2004 to 2006 at peak prices and many of them were refinanced to even higher loan amounts.

According to information services providers Experian and Oliver Wyman, about 588,000 underwater borrowers nationwide walked away from their mortgage loans in 2008. With Fort Lauderdale foreclosure homes depressing home values further, it is expected that more underwater borrowers in the area decide to walk away from their homes and their mortgage loans.

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