Via EYE ON MIAMI, some stark numbers on foreclosures in Miami-Dade county:
In the first 4 months of this year we have had 25,577 foreclosures in Miami Dade County. That is almost as many as we had the entire year in 2007 (26,391) and more than 3 times as many as we had the entire year in 2005 (7,829). During the same 4 months in 2008 we had 16,248 foreclosures, and ended 2008 with 56,656 total. If we keep up with the current trend, we will close 2009 with more than 75,000 foreclosures. If you add all the foreclosures between 2002 and 2007 (6 years) the total is 79,812. We could possibly reach that mark in one year!
Which is why doing something is so important….
“Stark Foreclosure Data for 2009.” hmm…While I certainly sympathize with those losing their homes, I am not convinced that the foreclosure data is all bad news.
Mid-decade housing prices in South Florida were far out stripping salaries. My middle of the road lawyer’s salary combined with my wife’s (college educated) salary were not enough to afford to buy a house. We often contemplated leaving Miami because we thought that we would not ever be able to afford a home here. Now that the bubble has burst, prices are falling and we are thrilled. We can now actually afford to live in Miami where we both grew up and where we can be with our family and friends.
My wife and I are not alone here and I use myself merely as an example.
The 76,000 foreclosures in Miami this year will drive prices down to where they should be and in the process will allow people (like me and thousands of others) to buy reasonable housing at a reasonable price.
Capitalism is ugly. But don’t be confused, the ugly time is not now. The ugly time was four years ago when people like my wife and I were told that after doing the right thing (ie working hard, and getting good educations), that we would still not be able to afford the American Dream, and that we were chumps for buying into the Dream to begin with. The “forclosure crisis” is the chance to correct this wrong.
That said, I wish you and UM’s foreclosure defense program all the best of luck.
I think the best thing we could do is create a process to streamline the foreclosure process so that people who cannot afford their housing can be swiftly removed from the premises.
I have been waiting to buy a home in SF Bay Area for several years and the prices are still over-inflated and will likely stay that way as long as tens of thousands of people continue to live in foreclosed homes (often without making any payments.)
The “American Dream” as you call it is a sham. All the land in South Florida once belonged to the Seminole and other tribes. So what the heck makes you more entitled to it than the people michael’s program will be helping? Sounds to me like you have no right whatsoever, you and your wife both have jobs, you should be happy with that. But nooooo, you want to snatch a “deal” on a home right out from under someone simply because they fell on tough times. That kind of behavior should be outlawed.
What is a mortgage? Its nothing but a piece of paper. You are saying that just because of some stupid piece of paper, drafted by the bank no doubt, that people should have to pay to live in their own homes?! I don’t get it.
My wife and I are thankful for having jobs, and things could always be worse. We are not trying to “snatch a deal” on the backs of another’s tough time. Perhaps you are going through a foreclosure now. If so, I wish you and your family luck.
The crux of my comment can be summed up in two phrases (both of which are included in my original comment): “Mid-decade housing prices in South Florida were far out stripping salaries” and “foreclosures in Miami this year will drive prices down to where they should be and in the process will allow people (like me and thousands of others) to buy reasonable housing at a reasonable price.”
The housing boom of a few years ago was irrational and many people bought homes they would not be able to afford in the long run. I sympathize with the individuals who are suffering from it. However, the correction is necessary. Without it, only the rich would be able to afford to live in Miami and the middle and working class(es) would be quickly forced out. This would not be sustainable in the long term.
I dont want to hijack this post (it is after all Michaels blog). If you want to try to trash me or the American Dream some more, or discuss the potential legality of my hopes and plans, please feel free to email me at email@example.com. If you live in Miami, maybe we can talk about it over a beer or two (Michael, you are invited to join in as moderator, contributor, or just as a fellow beer drinker).
Sounds fun, but I’m about to decamp for basically the whole summer, so I’ll need a rain check until school starts.
I think animal farm was a troll who threw out some bait and you took it.
I hope this once-in-a-lifetime opportunity works out well for you. I would advise you to research the market (I know you already have) and bargain as hard as you can. And I live in China so I am not kidding when I say ‘as hard as you can’.
The market (I am not in Miami and don’t mean your *local* market) will not bottom for some time: I am estimating at least 6 more months. Your area got hit much harder, so I guess that pushes the chart out somewhat.
On my blog I have made my argument. You may check there for some, not many, details, just a bit more analysis. Check out Calculated Risk for everything else, I would warrant.
Too many buyers are now shut out, plus way, way too many houses, even in areas like yours. The construction industry, distinct from the mortgage industry, was getting all the wrong signals for probably 3 years, and that is what is so destructive.
I am effectively innumerate, (nor have I any design capability) so I am not easily able to start to quantify numbers and create charts.
But there IS a balance there, a shift where the tipping point is reached. And I am arguing that we may well have thrown that balance so out of whack that we will need a couple years to pick up the slack.
I believe that if you went in and bargained hard, you would keep winning, over the course of 5 months. Starting anytime in the short term. I am talking long-term discussions on multiple places. Then see which one is really ‘distressed’.
Also, be careful going too far out of the metro area. Some areas are going to contract, even in Florida…
Then, after you buy, plan to lose another 10% in the short term. Its that bad.
People probably still don’t understand what a game changer this is going to be. I was in B school in 07 and asked lots of top profs, from different schools, whether subprime was a problem. The unanimous answer was ‘no’.