MANATEE -- One month after posting the worst totals in more than two years, Manatee County saw new foreclosure starts drop significantly in July.
But Manatee's slow month for home defaults was met with a steady climb of foreclosure activity just south in Sarasota, throwing another curveball into an economy that can't find much stability in Southwest Florida's foreclosure roller coaster.
Realtors continue to point to scarce inventories of bank repossessions as a sign the worst may be over. Other industry experts have been warning of a surge in new filings expected this year from the $25 billion fraud settlement, giving lenders clearer guidelines for processing the backlog of cases.
Many now fear slowed hiring trends and dire financial problems in Europe cascading here will make it more difficult for homeowners to meet their mortgage payments.
Confidence is improving, but consumers remain worried about their jobs and the economy, said Gary Jackson, director of the Regional Economic Research Institute and economics professor at Florida Gulf Coast University.
"There's still a lot of uncertainty as to what will happen," he said. "If the economy stalls, and people become unemployed, that could create another wave. I expect it will be choppy, and we'll see some ups and downs, but overall my expectation is things are slowly going to improve."
Manatee reported 320 total foreclosures in July, a 66 percent drop from the 948 just a month earlier and 54 percent slide from the same time last year, according to figures released by Real
tyTrac, which records default notices, scheduled auctions and bank repos.
New foreclosure starts continued to make up the bulk of the totals at 152. But that's down greatly from the 506 foreclosure starts in Manatee in June. There were 296 in July 2011.
In Sarasota County, the 697 total foreclosures in July represented a 28 percent jump from June's 545 and 12 percent increase from a year ago, according to RealtyTrac.
New starts in Sarasota also cooled some, with 289 initial filings in July, down from 320 a month ago and up slightly from the 272 in July 2011, records show.
New firms are once again picking up cases that were dismissed when giant foreclosure mills like the one ran by embattled South Florida attorney David Stern were shut down last year.
The biggest hurdle now facing recovery is an unwillingness by the mortgage industry -- including Fannie Mae and Freddie Mac -- to reduce principals on underwater borrowers, said David Hicks, a Sarasota foreclosure attorney.
He says the threat of foreclosure among area homeowners remains dangerously high.
"We have been consistent since the crash with the number of clients coming to our door for help," Hicks said. "People hanging on, who have been trying for six, eight, 12 months to work out a loan modification, have been unsuccessful. Soon they'll be missing their payments."
Foreclosures in July also were down greatly in Charlotte and DeSoto counties. They rose in Hillsborough and Pinellas.
Across the Sunshine State, there were 25,534 total foreclosures in July, an increase of 14 percent from both June and the same time last year, according to RealtyTrac.
One in every 352 housing units in Florida is a foreclosure -- the third highest rate in the nation behind only California and Arizona.
The recent foreclosure improvements coupled with strong sales activity has eaten away the market's supply of existing homes, which has held for much of the year under six months worth -- the historic equilibrium between a buyer's and seller's market.
That shortage of inventory has made it difficult to satisfy buyer demand, said Leslie Wells, president of the Manatee Association of Realtors.
"It's still pretty tight," she said. "We're trying to encourage people to put their houses on the market. We just haven't seen a lot of the foreclosures come on."
Josh Salman, Herald business writer, can be reached at 941-745-7095. Follow him on Twitter @JoshSalman