Miami, Las Vegas still hardest hit with foreclosures and delinquencies
Despite hopes for a leveling off of homes entering foreclosure, the percentage of homes in foreclosure has increased to 3% of all mortgaged homes, from 2.2% the year before, according to Santa Ana, Calif.-based First American CoreLogic, a housing data firm. Some of the country's largest cities, such as Miami and Los Angeles, are among a host of hard-hit metro areas.
Currently there are 3.5 million mortgages at least 90 days delinquent, according to First American, and two million mortgages at least 180 days delinquent. The glut of foreclosed homes portends low prices and a continued buyers' market, as supply outstrips demand. So what else is new?
The cities suffering the biggest onslaught of foreclosures and delinquencies are, not surprisingly, the ones that overbuilt, especially condominiums. The 90-day delinquency rate in Las Vegas, for example, is 21.7%, and Miami, at 28.8%, ranks the worst city for homes in foreclosure or already bank-owned, according to First American and research by Forbes.com.
But what's up with Chicago and Los Angeles? Chicago, which doesn't typically show up on lists of distressed housing markets, has an 11% delinquency rate and 5.1% of mortgages are in foreclosure or the homes already are bank-owned. Metro L.A.'s delinquency rate, at 12%, eclipses even past market downturns, when cities in Southern California's outlying areas, like Palmdale and Lancaster, posted numbers like these.
"We all thought Southern California was the place to be and didn't see ourselves going through what Detroit and Cleveland were experiencing," said broker Mike Teer, of Teer One Properties in Riverside, Calif. That city currently has a 19.1% delinquency rate and 7.7% foreclosure and bank-owned, or REO, rate, twice the national average. "We thought we were special."
Detroit, Mich., has a 15.8% delinquency rate and 6.6% of mortgages are in foreclosure or the banks own the homes.
Adding insult to injury, Teer said, buyers who moved to the Inland Empire's Riverside and San Bernardino counties for less-expensive homes, despite long commutes to Orange and L.A. counties, have moved back. "With these lower prices, they feel like they may as well live where they wanted to in the first place."
And the situation may get worse nationwide.
"The government moratoriums, which are ending soon, have just delayed foreclosures, so we'll see more of them, I'm afraid," Teer says. "Our best hope are the first-time buyer and move-up buyer credits," but those programs also have looming expiration dates. Furthermore, move-up buyers have to wait until they find buyers for their current homes, Teer says. Good luck with that.
Other hard-hit California cities are Sacramento, Fresno and Bakersfield. Atlantic City, NJ, has a 12.4% delinquency rate, while Phoenix, Ariz., is at 14.9%.
Looks like we may have to wait until next spring before the market resuscitates. And hope it doesn't tank worse in the meantime.