Florida is a top state for real estate transactions, as many people worldwide want to live and do business in this pleasant location. With such a desirable area, it may be surprising to discover that the state has one of the highest foreclosure rates in the United States.
Understanding the reasons behind common foreclosures can help homeowners and others in the real estate market make wise decisions.
1. Severe weather
As a coastal state, Florida continually faces damage from hurricanes, tropical storms and tornadoes. Florida is home to many people of modest means, and a catastrophic event can upend their lives. Homeowners’ insurance is harder to come by because of continual climate threats. High deductibles may move some people to stop paying or mortgage or to leave the home entirely, letting it fall into delinquency.
2. The tourism economy
Millions of visitors come to see the sights and attractions in Florida year-round. Global events can dramatically affect the number of tourists and impact the income of workers in the tourism sector. When tourism declines, foreclosure rates peak.
3. Vacation homes
Florida has a high concentration of second and third homes. Understandably, if people with multiple properties encounter financial struggles, the substantial expense of an additional home can be the first item they let go of. If the state or national economy is ebbing, then selling the house may be particularly difficult, leaving foreclosure as a tempting option.
Unavoidable circumstances can make the prospect of foreclosure a bitter reality for property owners. Understanding the risks and arming oneself with knowledge can help a person find ways to hold onto a dwelling.