The current list of Top 10 Turnaround Towns, developed using year-over-year comparative data from the fourth quarters of 2011 and 2010, begins with three of the nation’s top foreclosure markets that also achieved significant year-over-year median list price appreciation: Miami, FL, Phoenix, AZ, and Orlando, FL. They were followed by Fort Myers-Cape Coral, FL, which fell from third to fourth on the Realtor.com Top 10 Turnaround Town list in one quarter, and Sarasota-Bradenton, FL which rose from sixth to fifth. Ranking sixth was Boise City, ID, the only Rocky Mountain market to make the list. Four Florida markets rounded out the list including: Naples, Fort Lauderdale, Lakeland-Winter Haven and Punta Gorda.

The market rankings are based on year-over-year median price appreciation, reduction in year-over-year median age of inventory, and inventory reduction levels as observed on Realtor.com, as well as unemployment rates on a year-over-year basis. The Realtor.com Top 10 Turnaround Report is based on an algorithm that combines those four key measures with searches for properties on Realtor.com and the ratio of searches to listings in order to equalize markets by size. The resulting report reflects price changes that have taken place and gives weight to supply and demand dynamics that create continued progress towards growth and stability in future months.

The Realtor.com Top 10 Turnaround Towns, according to Fourth Quarter 2011 data are:

Miami, FL is leading the nation on the turnaround path. According to the Miami Association of Realtors, sales of existing single-family homes in the Miami Metropolitan Statistical Area (MSA) jumped 51 percent in the third quarter compared to a year ago.Miami has half as many properties in Realtor.com’s inventory of listings as it had a year ago, and the median age of inventory is down 30 percent from a year ago. Miami also continues to be a hot market for international buyers. In May, international clients purchased about 60 percent of the existing houses and condos and 90 percent of the newly built homes in Miami.[With inventory stabilized and median list prices regaining some of the 50 percent of value that was lost since 2006,] experts say one of the hardest hit foreclosure markets in the nation is on its way back.

Phoenix-Mesa AZ advanced two places on this Top 10 list between the third and fourth quarters of 2011. One of the areas hit hardest by foreclosures, Phoenix today still generates one foreclosure filing for every 317 housing units. Median list prices in Phoenix are up 15.38 percent on a year-over-year basis, but the market has to regain ground on what was lost in recent years. An uptick in demand driven by foreclosure bargains has contributed to a 27.47 year-over-year decline in the local median age of inventory. Unemployment in November was only 7.7 percent, below both state and national rates. With inventory in check, an improving local economy and growing demand, it’s only a matter of time before Phoenix returns to stability and lasting home value appreciation.

Orlando, FL secured its number three spot on the Realtor.com list of Top 10 Turnaround Towns as a result of progress made toward getting inventory back in balance with demand, suggesting the market may be stabilizing and turning a corner. The median age of inventory in Orlando on Realtor.com in the fourth quarter was down to 73 days, a 36 percent drop from a year ago and inventory was down 44 percent compared to a year ago. The Orlando MSA posted big declines in November foreclosure filings compared to the prior year and month. Lake, Orange, Osceola and Seminole counties posted 2,806 filings, or one in every 323 households. This is down 24 percent from November 2010, and nearly 36 percent down from the October 2011 filings. Fourth quarter 2011 year-over-year list prices on Realtor.com in Orlando rose 8.22 percent. Orlando leads the nation in the ratio of searches to listings on Realtor.com, a leading indicator that buyer demand may strengthen in the near future.

Fort Myers-Cape Coral, FL fell one rung to fourth place in the fourth quarter 2011 ranking on the list, but its recovery remains strong. Its median sale price has increased 20 percent over the past year, more than any other Florida market, though sales are down 13 percent.. The market led the nation in year-over-year median list price increases on Realtor.com (31.27%.) in the fourth quarter 2011, and ranked 14th in inventory declines that same quarter compared to a year ago. Only one in every 390 homes in the Fort Myers metro market received a foreclosure filing in December

Sarasota-Bradenton, FL ranks fifth in the nation on Realtor.com’s Top Turnaround Towns list for the fourth quarter 2011. Sales have been hopping in Sarasota and Bradenton this past fall, which is up 17 percent over last year. Median list prices were up 2 percent.] for the same period. This sales resurgence paralleled the drop in the available for sale inventory observed on Realtor.com, which just may place the remaining homes in range of a seller’s market. List prices on Realtor.com were up 10.78 percent in the fourth quarter 2011 compared to the fourth quarter 2010, and inventory is down 31 percent from a year ago.

Boise City, ID year-over-year for sale inventory observed by Realtor.com is down 40 percent, eighth best in the nation based on the year-over-year rate of decline. A key reason for the declining inventory is a reduction in foreclosures. A smaller inventory has helped drop the median age of inventory by 23.42 percent compared to a year ago. Smaller inventory is driving a median listing price increase of 13.77 percent, fifth best among Realtor.com’s 146 markets in the fourth quarter of 2011. Boise’s unemployment rate at 8.5 percent in November is better than the national rate.

Naples, FL is a newcomer to the Top 10 Turnaround Town list this quarter, powered by a 13.38 percent year-over-year increase in median list prices, seventh best in the nation overall, and a 35.94 percent reduction in for sale inventory. The median age of inventory in Naples is down 13.64 percent compared to a year ago. Demand in Naples, FL has been fueled by foreign buyers as the MSA attracts 6 percent of Florida’s international sales.While not everyone is bullish on Naples, sales are up and prices are moderating. The latest sales data from the Naples Board of Realtors confirms that the market is in the midst of change, but moving in the right direction. Sales of November single family homes are up 8 percent from November 2010 but sale prices are down 13 percent. Inventory is down 21 percent from a year ago.

Fort Lauderdale, FL has benefited from a shrinking inventory, which is down 41.63 percent year-over-year - sixth best (lowest) in the nation as observed by Realtor.com. Sales were up 22 percent in November and sale prices were up 18 percent year-over-year. List prices are up 7.84 percent over last year. However, like many other Florida markets, Fort Lauderdale, whose prices fell at least 46 percent from 2006 to 2010, still has a ways to go in part due to an unemployment problem affecting its housing market. But in November its unemployment rate fell to 9.4 percent.

Lakeland-Winter Haven, FL has observed a 9.09 percent increase in median list prices compared to a year ago. Its inventory has declined 35.28 percent since 2010 and its search-to-inventory ratio on Realtor.com, a measure of the number of buyers who are shopping for properties in the market, ranks fourth highest (best) in the nation in the fourth quarter 2011. As recently as a year ago, Lakeland-Winter Haven, FL was at the top of the national lists for foreclosure filings. But in recent months foreclosures in this MSA have been declining. In September, there were a total of only 86 distressed homes sold, compared to the 107 homes the previous month and 132 homes the previous year. Lakeland’s biggest hurdle on the road to recovery is its unemployment rate that dropped from 12 to 11 percent from the third to the fourth quarter, just a point over the state average.

Punta Gorda, FL returns to the Top 10 Turnaround Town list for the fourth quarter 2011 after it fell off the list the previous quarter. Like other Florida markets, it’s a market on the rebound, with both sale prices and sales up 11 percent year-over-year in November. Punta Gorda made it back to its 10^th place position on this list thanks to its29.25 percent year-over-year reduction in for sale inventory. But prices are just starting to turn around and must still make up for the 56.2 percent decline in home values observed since 2006. Currently Punta Gorda properties are selling at bargain prices, attracting both domestic and international buyers.

A fascinating new study soon to be released from Clear Capital , a leading real estate data provider, has useful answers to these questions as well as road signs you can use to track your local recovery. It tossed out some of the outdated views of recovery-like the assumption that home values can’t appreciate at a health rate amid significant numbers of foreclosures.

Equipped with a database that measures REO saturation by market, Clear Capital, has studied several of the nation’s most volatile markets, like Miami and Orlando, and analyzed the processes that brought crippled markets back to life.

Here are some of the signs likely to indicate that a price floor has been hit;

• Modest improvement in distressed home sale prices across all price tiers and declining levels of distressed sales as a percentage of total sales . A recovery in the distressed segment, regardless of the magnitude, creates a resistance to downward movement across all price tiers.
• Cash versus financed transactions are a key to investor participation. In Miami, 59 percent of all sales in 2011 were purchased with cash, as were nearly half (48 percent) of Orlando’s sales. This is a significant increase from the national average of 28 percent in November reported by the National Association of Realtors.
• Substantial improvement in values in their lower priced segments - below $70,000.

In an interview with Real Estate Economy Watch, Alex Villacorta, Clear Capital’s director of Research & Analytics, said the increased stability is occurring in the markets they have studied despite a backlog of foreclosures in the of properties in the foreclosure pipeline . RealtyTrac last week rated Florida third longest in the nation for its median foreclosure processing time, at 806 days.

“What’s happening in these markets is taking place without the backlog,” he said. “During most of 2011, Orlando had an average 50 percent REO saturation. Now it’s down to 25 percent and prices are increasing.”

Dr. Villacorta pointed out that to some degree REO sales are more seasonal than fair market sales. A lot of the markets he’s followed are reaching equilibrium at 30 percent of so of REO saturation.

Average days on market for properties over half a million averaged 222 days last week and has risen every week since August when DOM was at a year-low of 100 days, according to the latest monthly data from the Institute for Luxury Home Marketing. After falling since early July, inventories rose last week, reaching 23,416 homes in the ILHM market profile.

Thirty percent of listed properties have had a price decrease and even though the balance between supply and demand improved slightly in the first two weeks of the year, new listings slightly exceeded absorptions. Median price at $1,097,660 and median asking price per square foot at 333 were unchanged.

Top ten markets with the longest average days on market are Miami (308 days), Chicago (301), Detroit (271), Phoenix (264), New York (261), Orlando (253), Raleigh-Durham (252), Philadelphia (242), Charlotte (228) and Denver (226). Properties are moving fastest in Sacramento/Tahoe (173), San Diego (176) and Washington (176).

Overall existing-home sales rose 5.0 percent in December to a seasonally adjusted annual rate of 4.61 million from a downwardly revised 4.39 million in November, and are 3.6 percent higher than the 4.45 million-unit level in December 2010. The estimates from the National Association of Realtors are based on completed transactions from multiple listing services that include single-family homes, townhomes, condominiums and co-ops.

However, though national prices will be flat, some 40 percent of the top 50 markets it tracks will stabilize in 2012, forecast Clear Capital, a premium provider of data and solutions for real estate asset valuation and risk assessment for large financial services companies.

Clear Capital today reported a 2.1 percent year-over-year decrease in 2011 that was bolstered by a stabilizing of prices in the latter half of the year and decreasing REO saturation.

“Overall, 2011 was a relatively quiet year for U.S. home prices compared to the last five years,” said Dr. Alex Villacorta, Director of Research and Analytics at Clear Capital. “With national prices down a little more than two percent for the year and sitting at their lowest point since 2001, our projections show that the current balance the market has found will continue through 2012.

“However, individual markets reacting to their local economic drivers exhibit a wide range of performance levels,” added Dr. Villacorta. “Although the national numbers suggest markets are flat, when looking at individual metro markets it turns out only 24 percent of them showed signs of stabilization in 2011, while the others are still moving more dramatically higher or lower. What’s most interesting is that the lower segments of appreciating markets are driving much of the current price growth. In places like Florida, which have historically been hard hit, we are now seeing considerable activity in lower-end properties as demand continues to heat up.”

U.S. prices declined -0.4 percent in December on a quarter-over-quarter basis, showing the markets giving back some of the gains of the summer buying season. This is the first cooling off after six monthly reports showing minimal quarterly gains. In fact, the most recent six months of the year (June - December) saw national home prices flat at -0.1 percent.

While these national quarterly numbers for December fell slightly, half of the major markets covered saw quarterly gains. Dayton, OH checked in at the top of highest quarterly performers with a gain of 5.0%. On the downside, Atlanta, GA showed consistent weakness as December’s lowest performing major market with a loss of -8.4 percent quarter-over-quarter.

In addition to the relatively flat home price performance, national REO saturation rates at the end of 2011 reached a new yearly low at 24.8 percent. REO saturation was volatile early in 2011, and showed consistent declines and stability toward the latter half of the year.

On the national level, 2012 is expected to play out much like the last half of 2011, with a very subtle price change. A minimal decline in the beginning of the year is expected to turn into a meager gain by year’s end. At a more granular level, half of the 50 major metro markets are expected to post gains for the year, and individual metros will experience the full gamut of price movement, from double-digit growth to double-digit drops.

Double digit volatility can be seen with the two strongest markets, including Orlando with a healthy price increase of 11.7 percent, and Bakersfield close behind with a projected 11.1 percent increase. The deepest drops come from Atlanta with an expected drop of -14.4 percent, and Los Angeles with a predicted drop of -10.3 percent.

Florida markets are expected to extend their impressive 2011 performances into 2012. Miami and Tampa are projected to be among the five highest performing metros with 8.8 percent and 7.4 percent growth, respectively, and Jacksonville is forecasted to gain 4.3 percent, placing it at a respectable eighth among the top metro markets. The exceptional growth in these markets can be a result of several factors, including being hit especially hard in the downturn. While fighting back, they remain significantly off their highs of 2006. Other factors in play in these markets include large increases in the values of their lower priced homes (near double-digits for all markets) when compared to higher priced segments of the market, and a high percentage of all cash transactions (51.8 percent) when compared to other metros. This indicates a high degree of investor activity as they look for bargains in the region, driving up demand.

Although the range of movement for U.S. prices stabilized through 2011, prices have settled at the lowest level since early 2001. The forecast for 2012 shows home prices starting with a dip in the first quarter, improving in the spring and summer buying season, and continuing to climb to 0.2 percent overall growth for 2012. Individual markets reacting to their local economic conditions continued to exhibit a wide range of performance levels in 2011, with only 12 of the top 50 metro markets (24 percent), returning year-over-year price movement that can be considered stable - price swings of less than 2.5 percentage points. This will continue into 2012, with only 40 percent being considered stable.

Counseled homeowners were at least 67 percent more likely to remain current on their mortgage nine months after receiving a loan modification cure, according to the Urban Institute. A small part of this effect is attributable to the impact of counseling on the size of monthly payment reductions. However, a significant part is attributable to other positive impacts of counseling, such as helping homeowners improve their financial management skills and assisting them in managing relationships with servicers.

The study also found that National Foreclosure Mitigation Counseling made it more likely that homeowners would receive a loan modification cure in the first place - increasing by at least 89 percent the relative odds of modification cures for counseled homeowners compared to non-counseled ones. The government’s Homeownership Affordable Modification Program amplified this positive effect. In the period before HAMP, 8 percent of homeowners receiving counseling assistance had modification cures, compared to 5 percent who did not receive counseling. Post-HAMP, 17 percent of homeowners receiving counseling assistance had modification cures, compared to 9 percent without.

HUD’s restored $40 million housing counseling funds will be distributed as grants to hundreds of programs and state housing finance agencies across the countries. Roughly $36 million will be used for helping homeowners avoid foreclosure, thwarting mortgage scams and teaching buyers how to purchase or rent a home. Another $4 million will be used for reverse mortgage counselors.

The Urban Institute’s three-year evaluation the National Foreclosure Mitigation Counseling program used a representative NFMC sample of 180,000 loans and a comparison non-NFMC sample of 155,000 loans to isolate the impact of NFMC counseling on loan performance through December 2010.

Improvement was seen in every component of the index - job security, savings, debt, net worth and overall financial situation. The biggest improvement was in job security, a critical metric for the real estate economy. Those feeling less secure than a year ago fell from 28 percent to 18 percent, while 64 percent now feel the same level of job security, the highest recorded since polling began in Dec. 2010.

Despite the December improvement, the Financial Security Index is still below 100, which indicates that consumers are feeling less financially secure than one year ago. “2011 was not a year of progress in terms of consumers’ financial security,” said Greg McBride, CFA, senior financial analyst for Bankrate.com. “Each component - job security, savings, debt, net worth and overall financial situation - ended 2011 lower than where it was in January.”

The survey found that those under age 30 feel more secure than other age groups, while those age 50 and up feel less secure than younger age groups.

In terms of retirement, the under-30 set feels more comfortable than other age groups, while those age 50-64 and retirees feel less secure.

Americans with annual household income of $75,000 or more are more comfortable than others, while parents and households with income under $30,000 are, understandably, less comfortable than anyone else.

Households with annual income of $75,000 or more are most likely to report higher net worth than one year ago, while those with household income under $30,000 are most likely to report lower net worth.

Those under age 30 are most likely to report a better overall financial situation, while those age 50-64, households with annual income less than $30,000 and the unemployed are the groups most likely to report their overall financial situation as worse today than one year ago.

According to the latest UFA Mortgage Report by University Financial Associates of Ann Arbor, Michigan, the stage is set for a recovery in the housing market. Under current economic conditions, investors and lenders should expect defaults on loans currently being originated to be only 31 percent higher than the average of loans originated in the 1990s, due solely to the local and national economic environment.

“Despite continuing high unemployment and the threat of contagion from Europe, our Default Risk Index has improved,” said Dennis Capozza, who is the Dale Dykema Professor of Business Administration in the Ross School of Business at the University of Michigan, and a founding principal of UFA. “With consumer balance sheets improving and mortgage rates at record lows, the stage is set for a recovery in the housing market. We await the catalyst.”

The UFA Default Risk Index measures the risk of default on newly originated nonprime mortgages. UFA’s analysis is based on a ‘constant-quality’ loan, that is, a loan with the same borrower, loan and collateral characteristics. The index reflects only the changes in current and expected future economic conditions, which are less favorable currently than in prior years.

Each quarter UFA evaluates economic conditions in the United States and assesses how these conditions will impact expected future defaults, prepayments, loss recoveries and loan values for prime and nonprime loans. A number of factors affect the expected defaults on a constant-quality loan. Most important are worsening economic conditions. A recession causes an erosion of both borrower and collateral performance. Borrowers are more likely to be subjected to a financial shock such as unemployment, and if shocked, will be less able to withstand the shock. Fed easing of interest rates has the opposite effect.

Today the BLS reported some l137,000 jobs wered added to private secgtor payrolls in September. Economists surveyed by Dow Jones Newswires expected payrolls would rise by 60,000 last month. As result, mortgage rates on a 30-year fixed moved above 4 percent after hitting an all-time record low earlier in the week.

The 30-year fixed-rate mortgage, dropped below 4 percent for the first time in modern history to 3.94 percent during the week ending Oct. 6, according to Freddie Mac’s weekly survey.

The general persistence of tight underwriting guidelines and a relatively high percentage of underwater loans in the market generally continue to limit the number of borrowers that can qualify.

Freddie’s survey for the most recent week also shows the average rate for a 15-year fixed-rate mortgage dropped two basis points to an all-time low at 3.28 percent, while the average rate for the five-year Treasury-indexed hybrid adjustable-rate mortgage slid 6 basis points to 2.96 percent.

Mortgage professionals saw rates rising and staying above 4 percent for the near term.

“For now, the outlook for the two factors that drove mortgage rates to new all-time lows, a weak US economy and fears over the EU debt crisis, appear better. As a result, mortgage rates have risen by about .25 percent,” said Evan Swanson a mortgage professional with Mortgage Trust, Inc., who believes the rates may rise in the near-term.

“From a technical perspective rate may get worse in the near-term. The 10yr Treasury note is currently at 2.09%. Should the 10yr Treasury yield close above 2.04% it would be a bad technical signal for rates. In that event I will shift my outlook to locking” he said.

With just three months to go, the average prediction for the price decline this year from last year’s levels improved from a 3.52 percent price decline predicted by the experts in June to 2.53 percent in the latest survey.  The survey is based upon the projected path of the S&P/Case-Shiller U.S. National Home Price Index over the coming five years.

However, longer term prices prospects registered by the experts were less clear and varied widely, from a 19.2 percent increase by 2015 to a 5.7 percent decrease.  However, the average prediction called for an average annual rate growth rate of only 1.1 percent through 2015.

“Relative to historical norms of average annual home price growth rates, the projected 1.1 percent nominal figure is dim, especially if broader inflation picks up (as many people think it will) within the coming 5 years,” said Terry Loebs, founder of Pulsenomics LLC, the firm that conducts the survey for MacroMarkets.

Loebs noted that the data still reveal a wide variety of individual views among panelists regarding a recovery in the U.S. housing market.  Loebs said, “The erosion of price expectations in the face of record low mortgage rates and the wide dispersion of views among many professional forecasters are symptoms of persistent dysfunction and imbalances in this country’s housing market.”

In the September survey, the panelists also offered their views of the likelihood, desirability and necessity for further government intervention in the U.S. housing and mortgage finance markets in the coming 12 months.  Almost three-quarters (73 percent) of the respondents who shared a view think that further policy action is “highly likely” or “likely”, while more than half (57 percent)  said such action is undesirable, and almost half (49 percent) said additional government action is unnecessary.

“Markets and government institutions are visibly struggling to respond consistently to an unprecedented rash of crises and conflicts.  These struggles diminish confidence, which compounds the underlying economic stresses and lowers expectations,” said Robert Shiller, MacroMarkets co-founder and Yale University professor of economics.  “Expectations for home price performance in 2011 have become somewhat less negative.  Unfortunately, the average projection is somewhat more negative for each of the following four years.”

Seven of the top ten markets in the nation whose media list prices are up year over year are Florida markets.  According to the latest data from Realtor.com, the world’s largest real estate site, Florida single family home and condo prices are zooming at the same time that the rest of the nation is still recovering from the first quarter’s double dip.

Unlike most sales and price reports which are surveys of a representative sample of transactions or indices based on just a few markets, Realtor.com’s report is based on the actual data from the 2.2 million listings in the 146 markets in its data base.  However, Realtor.com captures only the prices for which properties are listed, not actual sale prices.  Nor does it know when sales are closed, only when listings come and leave the site’s inventory.

August median prices in Fort Myers are up 33 percent from 2010. Miami is up 24 percent, Punta Gorda 20 percent, Sarasota-Bradenton 10 percent, Daytona 9.3 percent and Lakeland-Winter Haven 8.8 percent. Compare those increases to the national average increase for median list prices from all 146 metros tracked by Realtor.com: .46 percent.

These amazing year over year numbers are not simply the result of being compared to prices during the August 2010 nose dive following the end of the tax credit.  They are the real thing.  A handful of Florida markets have been leading the Realtor.com hit parade since the end of the first quarter.

With a high saturation of condos, resort, retirement and second homes, these markets were devastated by a combination of foreclosures evaporating demand.  Massive inventories of distress sales and slow absorption drove prices to peak lows.

Florida has a long way to go to get healthy.  The median property in a number of Florida markets has lost half its value or more since 2006.  The peak to trough price differential in many Florida markets is over 50 percent, among the greatest in the nation, according to Case-Shiller.  In Miami, for example, prices fell over 50 percent and didn’t trough until the double dip in the first quarter of this year.  Prices in Fort Lauderdale fell from 2006 at least 46 percent to 2010. Naples fell 52 percent.  Tampa, 43 percent.  Orlando, 51 percent.

It makes sense that at some point bargain prices like these in prime Florida markets will attract investors, both foreign and domestic, and there have been bargains indeed.  In Vero Beach, for example, the discount on foreclosures reached 53 percent in the second quarter; state-wide the media discount was 40 percent according to RealtyTrac.  By all accounts that seems to be the case. In several markets, notably Orlando, Sarasota, Lakeland and Miami, demand has been strong enough to bring supply and demand into close enough balance to reduce median time for listings in inventory by five to 25 percent.

Why then are markets like Jacksonville, Tampa and Orlando, where prices fell nearly as much as South Florida markets, not participating in the renaissance?  Discounts, deals and demand-such as it is-don’t tell the whole story.

The answer may be fewer foreclosures, and in turn, reduced inventory.  What differentiates markets like Fort Myers and Miami from Tampa and Orlando not just geography by a significant decline in foreclosure filings in South Florida that began early this year and reached 60 percent year to year decline in foreclosure activity in July and August.  Inventories are higher in northern Florida markets.

Miami-Dade County recorded 3,352 foreclosure-related actions in August, a 61 percent decrease from a year ago. Broward County had 2,806 foreclosure actions, a 63 percent decrease, while Palm Beach County recorded 2,035 foreclosure-related actions, a 66 percent decline, according to

During the second quarter of 2011, foreclosure actions plunged by 51 percent in the tri-county South Florida region compared to the same three-month period in 2010, according to a new report from CondoVultures.com, a site listing condos.

Fewer filings means fewer REOs are being listed, which has contributed to the significant reductions in inventories shared by all of the markets were pries are zooming.  Almost all have reduced their inventories in the past 12 months, some dramatically.  Since last year inventories of condos and single family homes are down 41 percent in Fort Myers, 47 percent in Miami, 32 percent in Punta Gorda, 33 percent in Sarasota, 32 percent in Daytona and 38 percent in Lakeland.

How long will the Florida phenomenon last?  Will double digit price increases discourage bargain hunters and encourage local owners to list their properties and dilute the inventory vacuum that has been behind the price?  Is the foreclosure fall off a result of servicer processing delays rather than fewer defaults?  Or is it just the beginning of a recovery trend in markets that have suffered most?

Perhaps Bank of America answered that question when it doubled its foreclosure filings in South Florida in August.  With a default rate well into the double digits, Florida still ranks number one in defaults.  Until the larger economic picture improves, it’s hard to believe the Florida price phenomenon will last much longer.

“Florida, particularly South Florida, is still in a real estate crisis and experts predict it will take a couple of years for Florida to win its battle over this downturn…Looks like there are going to be lots and lots of good bargains here in beautiful South Florida for those with the wherewithal to purchase them,” says Florida real estate attorney Rosa Eckstein Schechter.