Foreclosure listing prices in Palm Beach, Florida are being dropped by banks to lower levels in order to spur bidding wars, according to investors, realtors and owner occupant buyers who have been spending time in the area to look for bargains.

A lot of out-of-state buyers are getting frustrated because every property that they check out and want to buy receive multiple offers, pushing up the previously affordable asking price to levels above their price range.

According to Deerfield Beach-based real estate consultant Jack McCabe, competition is fiercest for homes priced between $150,000 and $250,000.

In January, the median sales price for Palm Beach single-family homes sold was $238,000, an increase of 9 percent from the median in January last year, based on sales figures from the Realtors Association of the Palm Beaches. Prices increase in part because of the decline in housing inventory, which fell to a supply of only eight months.

Despite the published increases in default and foreclosure listing numbers in Palm Beach and in other parts of Florida, the demand has been overwhelming supply in Palm Beach County.

According to a California-based foreclosure tracking company, almost 517,000 homes across Florida entered the foreclosure process in 2009, making Florida the third hardest hit by foreclosures in 2009.

Another report also said that Palm Beach County posted the highest mortgage default rate in Florida and in the country in December, with 20 percent of its mortgaged homes in default by three months or more. The December default rate was the highest posted by the county in the entire year of 2009 and was almost double its rate in December 2008.

Around 18.6 percent of mortgaged homes in Florida were seriously delinquent in December 2009 while only 8 percent of mortgage loans across the U.S. were in default by at least three months.

The foreclosure rate of Palm Beach County also rose in December, posting a 13-percent rate, five percentage points higher than the rate in December 2008. Statewide, the rate of foreclosure was 11 percent, far above the national rate of only three percent.

G. Stacy Sirmans, professor of real estate at Florida State University, also said that it is definitely a buyer’s market in Palm Beach and in Florida.

However, as proven by buyers who have not yet bought a home in Florida, the fierce competition for lower-priced homes in the state has been overtaking the record rate of foreclosure listing in Florida.

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