RealtyTrac LogoRealtyTrac’s Year-End 2014 U.S. Foreclosure Market Report, which includes December 2014, finds that U.S. foreclosure filings – default notices, scheduled auctions and bank repossessions – were down 18 percent from 2013 and 61 percent from their 2010 peak.

It’s the lowest annual rate since 2006.

While Florida’s foreclosure rate dipped to No. 2 for a few months in 2014, it ended the year on top.

According to RealtyTrac, 2.3 percent of Florida homes with a mortgage had a foreclosure filing last year. It’s followed by New Jersey (1.87 percent), Maryland (1.69 percent), Illinois (1.38 percent) and Nevada (1.32 percent).

In a closer look at metro areas, the top U.S. city (population 200,000-plus) for foreclosures was Atlantic City, N.J. (3.06 percent of all housing units with a foreclosure filing), but four Florida cities round out the top five: Miami (2.79 percent with a filing), Orlando (2.69 percent), Palm Bay-Melbourne-Titusville (2.44 percent), and Tampa (2.41 percent).

The report showed that in the Naples-Marco Island metropolitan statistical area, the number of foreclosure filings fell to 1.06 percent of all housing units, or 2,092 homes, in 2014. In 2009, 6.38 percent of all housing units, or 12,251 homes, were in some stage of foreclosure.

In the Fort Myers-Cape Coral market, 1.72 percent of all homes, or 6,393 units, were in foreclosure in 2014. Five years earlier, 11.87 percent of all housing units, or 42,734 homes, had foreclosure filings.

While the percentage of homes in foreclosure is relatively small, both Naples-Marco Island and Fort Myers-Cape Coral have a greater percentage in foreclosure than the country as a whole. Out of 212 metro areas the company tracks nationwide, Cape Coral-Fort Myers ranked 15th, with one out of 58 housing units in foreclosure. Naples-Marco Island saw one in 94 units in foreclosure, and was 49th on the list of metro areas nationwide.

In the fourth quarter of 2014, it took an average 946 days to foreclose on a Florida home. Only two states took longer: Hawaii (1,067 days) and New Jersey (1,057 days). New York (934 days) and Illinois (903 days) rounded out the top five.

However, a look at the last two months of 2014 suggest that Florida’s foreclosure rate may be improving faster than in other states.

RealtyTrac says the overall Florida foreclosure rate in December declined 15.39 percent in just one month. Year-to-year it improved 24.81 percent. Only 13 states saw a greater decline in their month-to-month foreclosure rate – and the foreclosure rate increased in 21 other states.

National foreclosure rates

“The U.S. foreclosure numbers in 2014 show a foreclosure market close to finding a floor and stabilizing at a historically normal level,” says Daren Blomquist vice president at RealtyTrac. “But a recent surge in foreclosure starts and scheduled foreclosure auctions … in the last few months … indicate that lenders are gearing up for a spring cleaning of deferred distress in the first half of 2015 in some local markets.”

December U.S. foreclosure starts increased 6 percent from the previous month and 14 percent from a year ago – the second consecutive month where starts increased from a year ago, following 27 consecutive months of annual decreases.

“The December surge in foreclosure starts is not a cause for concern, as it comes from a previously existing supply of distressed properties,” says Andres Carbacho-Burgos, Senior Economist at Moody’s Analytics. “The national pool of distressed mortgages has not increased, despite the surge in foreclosure filings. “The list of states with increased activity in the last months of 2014 includes those with judicial foreclosure backlogs.”

Despite the annual increase in foreclosure starts in December and November, U.S. foreclosure starts for 2014 were still down compared to the previous year.

“There was an increase in scheduled foreclosure auctions in some judicial foreclosure states in 2013, and, as we expected, that resulted in a rising number of sales to third-party investors at foreclosure auctions in 2014,” Blomquist says. “We expect a continued high level of sales to third-party investors at the foreclosure auction in 2015.”