Sorting out the truth in state politics
By Katie Sanders, Times/Herald Tallahassee Bureau
In Print: Monday, November 21, 2011
Republicans have ruled the power centers of state government — the House, Senate and governor’s office — since the election of Gov. Jeb Bush in 1998. So what happens when a host of essentially locked-out Democrats comes together for a rally amid the worst recession since the Great Depression?
A whole lot of blame-tossing against the party in charge.
Democratic Party chairman Rod Smith, a former prosecutor who lost his 2006 gubernatorial bid to Charlie Crist, roasted Republicans in his recent speech at the party’s state convention as being out of touch with middle-class Americans.
He used the housing crisis as an example.
“Think about it. When Republicans took over the leadership of Florida, most of you had never even heard the term ‘underwater mortgage,’ ” Smith said. “Today 46 percent of all Floridians owe more on their home than it is worth.
“It is in a moment of crisis like we are (in) that a political party can revive itself, reinvent itself into a force that can recenter this nation, this state,” he said. “Unlike the Republicans, we don’t have some undying sworn oath that says we will keep supporting the same predatory practices that got us into this mess to start with. We’re the only party situated where we can reach out and lead the entire nation.”
We hear all the time about Florida’s foreclosure problems and unemployment. But Smith’s figure for the number of underwater mortgages in this state is striking. Do nearly half of Floridians really owe more on their mortgages than their homes are worth?
Being underwater means a homeowner owes more on the mortgage than the home is worth, and it’s happened to many homeowners since Florida’s housing bubble went bust. Borrowers who owe more than their homes are worth sometimes opt to leave their homes and let the properties enter foreclosure. These “strategic defaults” contribute to foreclosures clogging the courts, leading to even lower home prices.
From a previous fact-check of former Florida U.S. Rep. Alan Grayson, we already know that the national percentage of underwater homes is around 22 to 27 percent, depending on which real estate data-mining company you ask. If Smith is right, Florida’s figure would be almost twice the national average.
We asked CoreLogic Inc. and Zillow.com, two companies that analyze real estate data using county public records, to run the numbers for us.
CoreLogic’s most recent report, spanning April to June 2011, found Florida’s rate of underwater homes was the third-highest in the country at 45.1 percent, trailing Nevada at 60 percent and Arizona at 49 percent. The next-highest state is Michigan at 36 percent. By CoreLogic’s tally, the number of underwater homes in Florida as of June was about 1.97 million.
Zillow.com typically doesn’t measure states’ overall rate of underwater homes, said spokeswoman Alison Paoli. The company did, however, have underwater data for Florida’s metropolitan areas through the end of the third quarter ending in September.
The breakdown gives us some perspective about the places in Florida most plagued by sinking home values. Metro areas with the highest rate of underwater homes include Jacksonville (59.8 percent), Port St. Lucie (57.8 percent), Melbourne (54.8 percent) and Sarasota (51 percent). (Information for Orlando was not available.) The lowest-rate places? Those include Panama City (37.4 percent) and Gainesville (39.8 percent).
Rod Smith claimed that nearly half, or 46 percent, of Floridians owe more on their mortgages than the value of their homes. The most recent rate of underwater homes in Florida is 45.1 percent, behind only Nevada and Arizona. And that estimate is actually pretty conservative compared with what several metro areas are experiencing. Given the implications for our housing market, we suspect most Floridians are sorry that his claim checks out.
What’s not so clear is Smith’s suggestion that Florida Republicans are somehow responsible for the ailing housing market. While he doesn’t explicitly blame Republicans for causing the housing bust, he does suggest it, and that’s enough for us to downgrade his rating.
The housing bubble was a national phenomenon, at the heart of which were national lenders, and other states are feeling our pain. So we rate his claim Mostly True.
This ruling has been edited for print. Read the full version at PolitiFact.com/Florida.
“Today 46 percent of all Floridians owe more on their home than it is worth.”
Rod Smith, on Oct. 29, in speech at the Florida Democratic Party 2011 Convention
Smith has his numbers just about right, but he suggests that Republicans in state government are somehow to blame. The housing bubble was a national phenomenon, influenced by many factors. As such, we rate this claim Mostly True.