South Florida Foreclosures Jump 25% in Q3 2009

October 2, 2009

According to information published by Miami-based Condo Vultures® LLC, foreclosure actions in South Florida increased 25% in the 3rd quarter ended September 30th on a year-over-year basis.  “South Florida” encompasses a three-county area of the southeastern part of the U.S. state of Florida. The metropolitan area covers the counties of Miami-Dade, Broward, and Palm Beach. [click here for South Florida Foreclosure Table]
 
Default actions in South Florida increased by 42%in the first quarter, 33% in the second quarter, and 25% in the third quarter. In the first nine months of the year, South Florida has experienced 74,574 foreclosure actions, putting the region on pace for about 99,500 filings. At the end of the second quarter, the region was on pace to experience about 102,000 foreclosure actions.  By comparison, South Florida registered nearly 33,000 foreclosure actions for the year in 2007 and 75,000 in 2008, according to the report.
 
Even though the number of foreclosures continues to increase it has not translated into more properties going up for resale.  In South Florida, there were 71,229 residential resale properties on the market as of September 28, representing a drop of 34% from 107,527 single-family houses, condo units, and townhouses for resale in November 2008.
 
Peter Zalewski, a principal in Condo Vultures® is quoted saying, “The South Florida housing market has reached a fork in the road.”Going forward, the decisions of the federal government and the banking industry will more than ever ultimately determine where the housing market goes from here.” 
 
What’s interesting in the South Florida market, is that even though the number of foreclosures continues to increase is has not translated into more properties going up for resale, indicating that the market may stabilizing as bulk buyers, first time home owners and investors are looking to purchase bargains.
 
According to Condo Vultures, on a bulk basis, there have been 14 deals to close in South Florida since July 2008, and nine transactions since June 2009. At least three additional bulk deals are scheduled to close or already completed but not recorded in government records.  This has translated into a new retail price range for unsold condos in Greater Downtown Miami at between $200 and $250 per square foot. Bulk buyers have acquired a total of 806 units with 946,000 square feet for nearly $199 million, or $210 per square foot.
 
Click to enlarge
Click to enlarge

In a separate report, the Fort Myers News Press disclosed that foreclosures in Lee County (Fort Myers/Cape Coral/Lehigh Acres) fell 34.6% in September 2009 from September 2008 (1,610 vs 2,462).  While this initially appears to be good news, the article noted a big change in the “type” of foreclosures being reported.  While the foreclosures in the past were largely from inexpensive home and lots owned by investors and speculators, the more recent foreclosures are coming from the “middle class”, largely more expensive homes taken back from owners who have lost their jobs and simply could not hold out any longer.

While foreclosure actions dropped substantially in Lee County from a year ago, a similar reality to South Florida exists in number of homes available for sale.  As competition has heated up, the number of homes for sale has steadily dwindled.  According to a local realtor group, there were 11,258 listed in August compared to 16,509 a year earlier, representing a similar drop of 31.8%.  As noted above, South Florida listings dropped 34% from a year earlier.

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