The foreclosure crisis brought the state of Florida a bad reputation. But new home sales and investor demand seem to be perking up the coastal state.
Tampa home prices rose 5.9% year-over-year in October, while Miami prices rose 8.5%, according to data from the Standard & Poor's/Case-Shiller home price index report.
"I wouldn't say we are in a full recovery," said Becky Walzak, president and CEO of Looking Glass Group, a consulting firm for the consumer financial services industry in West Palm Beach, Fla. "But we are in a strong position right now. We have a lot of foreign buyers who come in and pay cash for properties," Walzak said. Snowbirds from the Northeast searching for real estate deals in Florida also have shown interest.
Still, it took a few years for the state to recover from news of massive foreclosure litigation and the launch of investigations targeting some of the state's largest default services law firms.
Walzak, who has three decades of experience in the mortgage industry, sees the state finally turning a corner even as foreclosures remain backlogged due to longer-than-average default timelines.
Florida is a judicial foreclosure state, which means every foreclosure requires court filings. In addition, mandatory arbitrations for distressed borrowers slow the process, making it take 15 to 18 months on average.
Walzak notes that even with a pent-up pipeline, or shadow inventory, she does not fear steep price declines from future foreclosures.
"They are slow. They come out in drips and drabs. It's not like we are going to have tens of thousands of foreclosures come through in a month."
Her only concern on the road to recovery is that the markets will "get too overly enthusiastic again."
While the state has markets experiencing signs of recovery, Walzak said there's less price improvement in the luxury market of homes that sell for more than $1 million. "They didn't go down as far (in terms of price), and there has been a slower rise in these prices. People are just very cautious about spending that amount of money on a property."