A few years ago, people eager to bask in the warm Florida sun were flocking to buy real estate in Miami year-round. South Beach was hot and hip again, and investors from the U.S. and abroad were buying and flipping condos even before construction was finished. The mortgage news at the time was upbeat and virtually no one predicted the dire downslide in the economy that was propelled in large part by subprime mortgage defaults.
Las Vegas was another Mecca for folks anxious to have access to the bustling entertainment city and enjoy the warm desert weather. The latest mortgage news reveals that these once popular Sunbelt cities are experiencing some of the highest foreclosure rates in the country. The states hardest hit by the recession are California, Florida, Nevada and Arizona where many retirees purchased homes, investors bought rental property and working couples bought vacation homes.
According to mortgage news statistics provided by RealtyTrac, in 2009, nine of the top metropolitan foreclosure areas (including Mercedes and Stockton) were in the state of California. Florida was in second place with eight of the top 20 foreclosure rates in the country. The cities of Cape Coral-Fort Myers, Florida had an 11.8% foreclosure rate in 2009, the second highest among all metropolitan areas nationwide.
Coming in third was Nevada which had two of the top 20 foreclosure rates in the US with more than 12% of the housing units in Las Vegas receiving a foreclosure filing in 2009, the most of any other city. Arizona made mortgage news and was next on the list of states most affected by foreclosures with Phoenix suffering from an 8.03% foreclosure rate.
Until a year or two ago, the mortgage news regarding foreclosures in these Sunbelt cities had not really affected the rest of country. Unfortunately, that trend didn’t last as foreclosures caused by rising unemployment and poor economic conditions began to spread to other large cities including: Portland, Oregon; Seattle, Washington; Provo, Utah; Fayetteville, Arkansas; Rockford, Illinois; Minneapolis, Minnesota; and even Honolulu, Hawaii.
U.S. Metropolitan Areas with Highest Foreclosure Rates in 2009
- Las Vegas, NV ― 12.04%
- Cape Coral- Fort Myers, FL ― 11.87%
- Merced, CA ― 10.10%
- Riverside-San Bernardino-Ontario, CA ― 8.80%
- Stockton, CA ― 8.62%
- Modesto, CA ― 8.53%
- Orlando-Kissimmee, FL ― 8.17%
- Phoenix-Mesa-Scottsdale, AZ ― 8.03%
- Port St. Lucie, FL ― 7.58%
- Miami-Fort Lauderdale- Pompano Beach, FL ― 7.16%
On the positive side is the latest mortgage news that in the top 10 worst affected locations, the rate of foreclosure activity is showing signs of slowing.
For those looking to buy a house, the high volume of foreclosed homes offers many buying opportunities. However, you must be especially careful if you are considering purchasing a distressed property.