During the month of January, existing condo inventory in the Greater Fort Lauderdale area reached a multi-year high of 9,390 units listed for sale.  You will notice from our chart below that we haven’t seen these levels in the past four years that we have been tracking the data.  You will probably have to go back to before the last bubble popped to see these levels of inventory on the market.

Another issue that could be problematic is that sales volume has been on the decline.  In any market, rising inventories coupled with a decline in sales volume is typically an indicator of trouble on the horizon.  Last May we discussed how the South Florida residential market was reaching a peak and when you look at this next chart of condo sales in Broward, it sure looks like we were correct. In the month of January, there were only 1,073 closings.  Not only was this a decline of 24% from December, but you have to go all the way back to January 2012 to see a transaction number this low.

• Traditional sales during the month of January dropped 24% from December levels
• Foreclosure sales dropped 28% from December levels
• Short sales dropped 9% from December levels

How about the median sale prices by transaction type?

• Traditional sales dropped 5% in January to $138,000
• Foreclosure sales dropped 1% in January to $93,500
• Short sales dropped 26% in January to $88,000

Finally, when we ran our last search of existing foreclosures throughout Broward County as of January 1, 2016, we found 4,922 condo units in foreclosure. Feel free to click on the chart to enlarge it and see which city has the highest amount of distressed condos.  Some of the chart leaders are:

• Fort Lauderdale – 373 condo properties in foreclosure
• Miramar – 308 condo properties in foreclosure
• Hollywood – 380 condo properties in foreclosure
• Pompano Beach – 433 condo properties in foreclosure
• Coral Springs – 374 condo properties in foreclosure
• Lauderhill – 410 condo properties in foreclosure

As for the pace of new foreclosure filings, we don’t have all of the February data yet, but here is a snapshot of new filings in the past year:

We always say that one month does not make a trend, but we see some storms brewing in the Fort Lauderdale area condo segment:

1. There are still plenty of foreclosures left from when the last bubble burst and are finally entering the market.
2. Although 2015 started out slowly, the pace of new foreclosure filings appears to be gaining steam.
3. New construction continues at a rapid pace as the City of Fort Lauderdale will green-light every project that is presented by developers.
4. Be wary of the new condo development presales data / propaganda and their source.  Deposit requirements have been lowered and therefore put closings at risk.
5. Overall transaction volume has declined to levels that we haven’t seen in years, just as inventory climbs to new highs.
6. After several years of using “extend and pretend” economics to reflate the economy, the party may finally be ending.
7. Broward County is hoping that money-launderers will rescue the market now that Miami-Dade has restrictions on cash sales over $1 million, but even they can’t bail you out of this mess!