I suppose this is the fault of capitalism, banks, and the Illuminati. Everyone except the people who took out loans they couldn’t (or wouldn’t) pay back. From The Miami Herald:

Sales of foreclosed homes in Florida made up nearly 40 percent of all purchases in the first part of this year, a “terrifying” statistic, one analyst said, and one that led to deeply discounted prices on distressed properties.

In Miami-Dade County, foreclosure sales made up nearly half — 47 percent — of all homes sales in the first five months of 2010, according to a new report from Irvine, Calif.-based RealtyTrac, which aims to measure foreclosure sales and their impact on home pricing. In Broward County, 46 percent of all homes sales involved distressed properties.

To compare, less than 1 percent of Florida home sales in 2005 were of foreclosed properties, RealtyTrac found.

The report, released Wednesday, defines foreclosure sales as those of homes that are bank owned or where the owners have defaulted on the mortgage and received at least one foreclosure notice.

“Forty percent is a significant number,” said Michael Sichenzia, president of Dynamic Consulting Enterprises in Deerfield Beach. “When you look at where it should be, it’s a terrifying number in the short term and will reverberate throughout the whole system.”

Ya think? All these “green shoots” Obamunists are relying on some mythical rebirth of the housing market to produce more wealth. But wealth is finite. The wealth from American home ownerships was spent and the housing market will not be pulling us out of a financial mess caused by people living beyond their means. The new homeowner has to realize their home is going to be where they are going to spend the rest of their lives, not a bank account they can tap to pay for extravagances they can’t afford.

The good news is that in the coming months you’re going to be able to get a house cheap. The bad news is that ever more expensive housing was a pillar of the world’s unsustainable economy.