Hot foreclosure markets have come and gone over the past seven years but one thing seems to stay the same. The markets with the most and the cheapest foreclosures are still located in Florida.
A judicial state that has had its share of controversy over robo-signing practices as well as high levels of negative equity and deep declines in home values since 2006, Florida markets still offer investors the best opportunities to buy and profit by either flipping or renting and holding renovated foreclosures.
To select the best places to buy foreclosures in 2013, RealtyTrac scored all metro areas with a population of 500,000 or more by summing up four numbers: months’ supply of foreclosure inventory, percentage of foreclosure sales, foreclosure discount, and percentage increase in foreclosure activity in 2012.
Topping the list of best places to buy foreclosures in 2013 was the Palm Bay-Melbourne-Titusville metro area in Florida with a total score of 394: 34 months’ supply of inventory, foreclosure sales representing 24 percent of all sales, average foreclosure discount of 28 percent, and a 308 percent increase in foreclosure activity in 2012 compared to 2011.
Five other Florida cities ranked among the Top 20 best places to buy foreclosures: Lakeland, Tampa, Jacksonville, Orlando, and Miami.
Late last year, Zillow calculated that the foreclosure discounts in Palm Beach, Broward and Miami-Dade counties shrank to 2.9 percent discount in September, down from 6.8 percent a year earlier Accordiong to Zillow, South Florida’s peak foreclosure discount was 22.7 percent in August 2008. But during the past year, a lack of homes for sale has frustrated buyers and led to multiple offers and bidding wars.
“The smallest foreclosure discount is found in places where competition for homes is so high, people there are willing to pay the same amount for a foreclosure re-sale that they would for a non-distressed home simply to take advantage of historic affordability,” Zillow Chief Economist Stan Humphries said in a statement.
RealtyTrac listed five New York cities among the 20 best places to buy foreclosures in 2013, based largely on big backlogs of foreclosure inventory and big increases in foreclosure activity in 2012: Rochester, Albany, New York, Poughkeepsie, and Syracuse. Like Florida, New York is a judicial state.
Other cities in the Top 20 were Chicago, Ill.; El Paso, Texas; Philadelphia; Allentown, Pa.; Youngstown, Ohio; Bridgeport, Conn.; Cleveland, Ohio; New Haven, Conn.; and Indianapolis, Ind.
The metro with the lowest score was McAllen, Texas, with a 12-month supply of foreclosure inventory, foreclosure sales accounting for 7 percent of all sales, an average foreclosure discount of 21 percent, and a 66 percent decrease in foreclosure activity in 2012 compared to 2011.
Metros with the lowest scores were dominated by cities in the west, including Ogden, Utah; Las Vegas, Salt Lake City, Phoenix, Portland, Ore., San Jose, Calif., and Honolulu.
RealtyTrac reported that Foreclosure activity in 2012 decreased from 2011 in 12 out of the nation’s 20 largest metro areas, led by Phoenix (down 37 percent), San Francisco (down 30 percent), Detroit (down 26 percent), Los Angeles (down 24 percent), and San Diego (down 24 percent).
But 2012 foreclosure activity increased in eight of the 20 largest metros, led by Tampa (80 percent increase), Miami (36 percent increase), Baltimore (34 percent increase), Chicago (30 percent increase), and New York (28 percent increase).