Is SWFL in a Foreclosure Crisis?

Back in August, Fox News published a report with new data that showed Southwest Florida in the midst of a “foreclosure crisis,” with skyrocketing rates of foreclosures throughout Fort Myers and beyond. Down here in the mortgage business, we’re obviously sensitive about anybody saying anything about a new incoming financial meltdown. To clear things up, I sat down with Jeff Tumbarello of the Southwest Florida Real Estate Association and Steelbridge Realty on episode 27 of my podcast, “The HartBeat Show.” Jeff’s name is big around town. He has a ton of knowledge about the local real estate business, so you could say he’s got his finger on the pulse.

But first, let’s break down the article. Basically, a property database company called ATTOM Data Solutions says, “The number of homeowners who have started the foreclosure process in Cape Coral and Fort Myers has gone up 59 percent since last July.” Fox also reports, “The year-over-year number from June was an increase of 64 percent, which is much higher than the nationwide increase of just 1 percent.”

These are definitely massive numbers, and if they told the whole truth, they’d be something to freak out about. But according to Jeff (and myself, and most other experts in the area), the numbers
are deeply misleading.

For one thing, there’s little data to suggest that we’re heading toward another 2006–2008 crisis. The market, as always, moves in cycles, but in this case, the bubble is growing pretty sustainably. “We’ve been looking at 3–5 percent price increases when I go year-over-year,” says Jeff. “And we almost resemble a Midwest-type market rather than the coastal boom-bust market, and that’s really a good thing!”

“But confirmation bias has taken out more people in business than cycles because we all tend to see what we want to see,” he adds. And in this case, people are frantic about an incoming crisis that just isn’t coming — at least not in the near future.

We really dug into it on the show, and unfortunately, there’s not room here to go over everything we discussed. To learn more, check out “The HartBeat Show Podcast.” You might just learn something. And I’d certainly appreciate it!