Why Foreclosures Filings Are Rising in Tourist-Haven States
By Alexander Hernandez, J.D., Professor, and Author of Consumer Bankruptcy Law (Routledge).
This is an Expert Opinion and Economic Analysis.
In July, nearly 36,130 properties across the U.S. were hit with foreclosure filings, a 13% spike year-over-year and the sharpest annual increase in 2025, according to ATTOM’s latest housing report. The trend underscores a growing financial strain among homeowners, particularly in states whose economies hinge on tourism.
Tourism-Driven Economies Are Cracking and Increasing Foreclosure Filings
Nevada led the nation in foreclosure filings, with 1 in every 2,326 homes facing default. My home state of Florida followed closely at 1 in every 2,420 units, trailed by Maryland, South Carolina, and Illinois. But the numbers only tell part of the story.
As I’ve previously argued on Bankruptcy.blog and in my YouTube commentary, the U.S. is experiencing a chilling effect on inbound tourism, which is being called tourismphobia. There’s also the boycotting of the U.S. (ABUSA)– Anything but the USA. All this results in billions of dollars in lost tourism revenue.
The U.S.-Canada Trade Wars
The Tariff Wars with Canada have triggered a sharp decline in Canadian visitors to U.S. destinations like Las Vegas, Miami, Naples, and especially New York.
Travel warnings and visa anxieties issued by European nations, including Germany, France, and the UK, citing political instability and entry risks, aren’t helping. The same with foreign students leaving the U.S. or not applying to American universities, as they are recruited by other countries. It’s been documented that even U.S. citizens are being stopped by Customs and Border Patrol to have their phones checked, even lawyers.
What worries me about lawyers, and I haven’t seen how that is being handled, is that allowing CBP to review emails of clients is a violation of the attorney-client privilege and could lead to a malpractice lawsuit and disbarment. If lawyers don’t comply, they are being threatened with arrest, which leads to disbarment! Which is the lesser of two evils?
Reports do indicate that CBP has said to skip the emails regarding clients, which would take hours to do. But that’s the point, isn’t it? Keep someone there for hours until they give in.
An Example of How it Affects Us All
Our dog passed away earlier this year. In the past, for certain trips, my mother would dog sit, but she passed away almost three years ago. So for travel now, we take camping trips. But without our beloved Bella, now would be the right opportunity to take certain trips we normally couldn’t. But now you know why I haven’t taken a cruise. Guess what that means? That I didn’t spend money.
For a country that depends so heavily on consumption, including travel, that’s an issue. Which is why I compare the economy to my bird pond.
As a tourist, why bother visiting a country where they check your social media posts and there’s the risk you get arrested unlawfully? The simple issue being ignored by those arrested by ICE is who pays the bills when a person is locked up for weeks? Any money has to get diverted to a lawyer, so you can imagine what this does to a person’s finances and credit.
Leaving Las Vegas
Las Vegas, the economic engine of Nevada, saw the third-highest foreclosure rate among major metros, 1 in every 1,914 homes. But while Sheryl Crow sings that she is standing in the middle of the desert waiting for her ship to come in, Florida has gone from sunshine to storm clouds, and I’m not referring to the weather.
Florida’s foreclosure woes mirror its tourism slump. Naples, once a haven for Canadian snowbirds, has been hit especially hard. April data showed a 19.4% drop in Canadian visitors to Collier County, with February’s decline reaching 23%. Miami and Fort Lauderdale have also seen steep declines in Canadian air travel, down 20% to 35% depending on the route.
The causes? Tariffs, political rhetoric, and a weak Canadian dollar. But the deeper issue is sentiment. Canadians and other international travelers are increasingly choosing Mexico, Europe, or domestic alternatives over the U.S., not because they can’t afford it, but because they no longer feel welcome.
With Florida, I’ll go a step further, it’s a triple whammy! It’s the coldest real estate market right now. Home insurance is unaffordable thanks to hurricanes. Sure, the Republicans like to argue that climate warming doesn’t exist, but trust me, home insurance companies beg to differ.
Also, building codes were revamped due to the collapse of a condominium in Surfside, which has resulted in astronomical special assessment fees, putting many homeowners in underwater mortgages.
What Comes Next?
This isn’t just a tourism story; it’s the snowball effect I’ve been arguing for months. When tourism dries up, jobs vanish, home values fall, and mortgage defaults rise. It’s all tied in together.
The U.S. housing market in tourism-reliant cities is feeling the effects of a global tariff war, political and financial uncertainty. The firing of Dr. Erika McEntarfer, the Bureau of Labor Statistics (BLS) chief, is an example of uncertainty. Can we trust government data moving forward?
If “tourismphobia” continues to spread, we may see more metros like Las Vegas and Naples become case studies in how politics affects the U.S. economy, something we haven’t experienced in our lifetimes. But, to quote Sheryl Crow one more time, this is becoming our new normal.
Professor Hernandez is an attorney specializing in consumer finance and debt relief. He is the published author of Consumer Bankruptcy Law (Routledge Publishing) and teaches law and finance courses in both English and Spanish for an international university.
Colleges and universities can purchase my bankruptcy law textbook directly from Routledge Publishing. Paralegals and students who are buying single copies can do so via Amazon Books. To access my YouTube channel, click this link. You can also listen to my podcast on Spotify.
You can learn more about filing for bankruptcy and the bankruptcy petition via this link. Information on the bankruptcy court system, contact information for trustees, and your state’s exemptions can be found here. The federal bankruptcy exemptions are listed here. The latest version of the 341 Meeting of the Creditors can be found here.
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