By Allison Linn
(Excerpt)
RealtyTrac reported Thursday that foreclosure filings rose by 9 percent in May from a month earlier, to 205,990 total properties that were subject to default notices, scheduled auctions or bank repossessions.
The jump in foreclosure activity was likely because lenders are finally getting to a backlog of homes they might have started foreclosing on last year if they weren’t facing criticism for cutting corners and pushing foreclosures through too quickly and without adequate controls, said Daren Blomquist, a vice president with RealtyTrac.
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Last night on NBCs Rock Center with Brian Williams was a segment on the real estate boom in south Florida generated because of buyers from Brazil. Remembering Obama gave/loaned Brazils Petrobras Oil company $2billion of our tax dollars to do deep water exploration I was curious how and why we would divert a large sum of sorely needed money to a nation that had so much they can afford to buy our land for their vacation homes.
Worth noting the GDP rate growth since 2002 from Wikipedia, and just how capitalism and deregulation can work if given a chance.
http://rockcenter.msnbc.msn.com/_news/2012/06/14/12207356-brazilians-snap-up-south-florida-real-estate-sparking-new-boom?pc=25&sp=75
Waves of wealthy Brazilians such as Luciano are landing on South Floridas shores and spending millions of dollars on vacation condominiums, clothes, furniture, cars and art, all of which are much less expensive here than in their homeland.
They started arriving in the past few years when South Florida was one of the epicenters of the real estate crisis, with vacant buildings and foreclosures all around. At the same time, Brazil’s economy was starting to surge, and as costs in Brazil soared, the United States and its depressed real estate prices made it the land of opportunity.
The prices here are really cheap now, said Luciano. If you look for the same type of unit to spend a vacation in Brazil, in a place like Rio, it’s double the price. If you go to Rio de Janeiro, you have problems everywhere. You have all the violence. Here, no problems, no violence. You can do whatever you want. You do a nice investment and spend your vacation at the same time.
The dollar exchange rate now is very good for the Brazilians, added Piquet, so now is the time to buy. And on top of that, the prices of the properties, they went down big time, about 50 percent. It’s a big discount.
Brazilians spent an estimated $1.6 billion vacationing in Florida in 2011, an increase of nearly 60 percent from the previous year. Brazil also happens to be the states top trading partner — in 2010, Florida’s trade with the country topped $14.4 billion.
For now, the Brazilian wave continues to grow. And Brazilians are not just taking Miami, but New York City too — buying up multimillion dollar apartments at some of New Yorks best addresses.
http://en.wikipedia.org/wiki/Economic_history_of_Brazil
1994-present (Post “Real Plan” economy)
The Plano Real (“Real Plan”), instituted in the spring 1994, sought to break inflationary expectations by pegging the real to the U.S. dollar. Inflation was brought down to single digit annual figures, but not fast enough to avoid substantial real exchange rate appreciation during the transition phase of the Plano Real. This appreciation meant that Brazilian goods were now more expensive relative to goods from other countries, which contributed to large current account deficits. However, no shortage of foreign currency ensued because of the financial community’s renewed interest in Brazilian markets as inflation rates stabilized and memories of the debt crisis of the 1980s faded.
The Real Plan successfully eliminated inflation, after many failed attempts to control it. Almost 25 million people turned into consumers.
The maintenance of large current account deficits via capital account surpluses became problematic as investors became more risk averse to emerging market exposure as a consequence of the Asian financial crisis in 1997 and the Russian bond default in August 1998. After crafting a fiscal adjustment program and pledging progress on structural reform, Brazil received a $41.5 billion IMF-led international support program in November 1998. In January 1999, the Brazilian Central Bank announced that the real would no longer be pegged to the U.S. dollar. This devaluation helped moderate the downturn in economic growth in 1999 that investors had expressed concerns about over the summer of 1998. Brazil’s debt to GDP ratio of 48% for 1999 beat the IMF target and helped reassure investors that Brazil will maintain tight fiscal and monetary policy even with a floating currency.
The economy grew 4.4% in 2000, but problems in Argentina in 2001, and growing concerns that the presidential candidate considered most likely to win, leftist Luis Incio Lula da Silva, would default on the debt, triggered a confidence crisis that caused the economy to decelerate. Poverty was down to near 16%.
In 2002, Luis Incio Lula da Silva won the presidential elections and was re-elected in 2006. During his government, the economy began to grow more rapidly. In 2004 Brazil saw a promising growth of 5.7% in GDP, following 2005 with a 3.2% growth, 2006 with a 4.0%, 2007 with a 6.1% and 2008 with a 5.1% growth. Due the 2008-2010 world financial crisis, Brazil’s economy was expected to slow down in 2009 between a decline of -0.5% and a growth of 0.0%. In reality, economic growth has continued at a high rate with economic growth hitting 7.5% in 2010.[1]