As available inventory of condo/townhouse properties in the Fort Lauderdale area continues to slide, it looks as if the transaction types may be seeing a rotation away from traditional transactions to a greater number of short sale and REO transactions.  Although this pattern may take several months to develop, it appears that we are now at the start of a new trend.

There was a slight uptick in short-sale transactions in May, along with a drop in traditional transactions as the amount of listed properties continued to slide.  In may, there were a total of 1,664 condo/townhouse sales closed in Broward County, where traditional “arms-length” transactions were 69.4% of all closings, foreclosure/REO sales were 14.4% of all sales and short-sales were 15.7% of all closings.  It is worth noting that short sales increased to 502 closings in May, up from 425 in April.  Also, traditional sales dropped from 1,239 in April to 1,154 in May.

Available inventory for sale climbed in May to 5,957 condo/townhouse units, up from 5,877 in April.  Sellers saw better pricing this spring, so it is possible that owners saw an opportunity to sell their unit into the better pricing environment.

The average selling price for a condo/townhouse unit in Broward County dipped slightly to $157,772 in May, down from $160,101 in April.  You will notice by comparing the inventory and price charts that the overall trends are divergent:  As available inventory has dropped, prices have risen.  This is the basic economic principle of supply and demand.

Finally, we have started tracking the difference in selling prices for traditional, REO and short sale transactions.  As the distressed properties start to enter the market again, this will be an interesting metric.

We are still waiting on the May foreclosure data, but in the interim we will post the last foreclosure count we conducted for the Broward County / Fort Lauderdale area condo/townhouse market.  There were 16,103 condo/townhouse properties in foreclosure as of April 26, 2013 and there were certainly be more once we conduct a new search.  At some point, a good percentage of these properties will hit the market.  Looking into the crystal ball, the combination of rising mortgage rates and increased distressed sales will really start putting some downward pressure on real estate prices in South Florida.