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Condo market inventory, prices, transaction types & distressed sales in the Fort Lauderdale area
The residential real estate data is in for October and today we will take a look at the condo / townhouse market in Broward County, Florida. First, let’s look at what types of transactions are closing.
There were 1,368 closings in October and they are broken down as follows:
- 996 traditional sales which accounted for 73% of all closings
- 211 foreclosure / REO sales which acounted for 15% of all closings
- 161 short sale transactions which accounted for 12% of all closings
Now let’s see what kind of prices these transactions fetched in October.
The median sale prices have recovered in the past few months and here are the numbers:
- The median traditional condo / townhouse sale price was $127,500 in October
- The median foreclosure / REO sale price was $85,000 in October
- The median short sale price was $100,800 in October
As the sale prices have gradually increased, it appears that more sellers are willing to test the market. The available inventory listed for sale rose 4% in October to 6,684 units. Some of the sellers are finally at a level where they are no longer underwater on their mortgages and others are comfortable testing the market at the current prices.
So what’s in store for the market? Well, as more supply becomes available, prices will most likely be capped. Also, we cannot ignore the massive shadow inventory of over 16,000 foreclosures that will eventually be placed for sale. Yes, this does not include the over 50,000 houses in foreclosure, just the condominium and townhouse properties.
The chart above shows which cities throughout Broward County have elevated levels of condo/townhouse properties in some stage of foreclosure. Feel free to click on the chart to enlarge and here are just a few “chart leading” cities:
- Fort Lauderdale has 1,235 condo/townhouse properties in some stage of foreclosure
- Miramar has 1,000 condo/townhouse properties in some stage of foreclosure
- Hollywood has 1,238 condo/townhouse properties in some stage of foreclosure
- Pompano Beach has 1,268 condo/townhouse properties in some stage of foreclosure
- Coral Springs has 1,349 condo/townhouse properties in some stage of foreclosure
- Lauderhill has 1,229 condo/townhouse properties in some stage of foreclosure
- Tamarac has 1,112 condo/townhouse properties in some stage of foreclosure
Finally, if we look at the pace of new foreclosure filings and the distressed sales, it will be very difficult to reduce the shadow inventory anytime in the near term.
As illustrated in the chart above, there were 655 new condo/townhouse foreclosure filings in October and only 372 distressed sales (simply combine the short sales and foreclosure/REO sales). If the market is going to “digest” over 16,000 foreclosures, it would take about 43 months (just over 3.5 years) to dispose of all the distressed condo / townhouse properties. But wait, that doesn’t include all of the new filings each month. That is a ridiculous assumption that the pace of new foreclosure filings will come to a screeching halt and from the looks of this final chart, that is not very realistic. There have already been 5,354 foreclosure actions filed in the condo/townhouse sector in 2013 up from 4,550 in all of 2012. Also, the monthly average in 2013 is 535, up from 379 in 2012 and this represents a 41% year over year increase. You will notice from far right side of the chart that new foreclosure filings in Broward are on the upswing (again). Next time you pick up the local paper and the headlines talk about a housing recovery in South Florida, just put it in storage for a few years and take it back out in 2015-2016. By then, we may actually have some data to support the repeated touts of a recovery.