The most recent data has been released for the Broward County / Fort Lauderdale area condo market. Once again, we have seen a continued drop in available inventory for sale. As of last month (October 2012), there were only 3,563 condo and townhouse units available for sale. This number is down from almost 9,000 units available for sale in January 2010.
With a declining supply, we are witnessing a short-term uptick in the average selling price of condo and townhouse units. The average selling price dipped to $130,192 in August, but has rebounded slightly to $150,120 in October.
As for distressed sales, I have included a chart of the percentage of distressed sales for sold properties, as well as the active and available inventory. You will notice that in June-September the percentage of closed sales that were distressed properties was at or over 20% at for the same period you will see the price dip in the chart above. This illustrates the direct correlation of REO/short sales and how they impact prices in the real estate market. The purpose of my charts and graphs is to help make sense of all the data and show buyers and sellers of real estate how to interpret the data releases.
The red line tracks the percentage of “active” listings that are either a short sale or bank-owned REO property. You will see that in early 2010, there was still REO inventory and that has gradually declined. The bulk of the distressed property inventory in the current market is made up of short sale properties until the banks accelerate their foreclosure processing through the court system.
Now for some math: There are currently only 3,563 condo-townhouse properties listed for sale in the Greater Fort Lauderdale area. With 17% of the listed properties being a “distressed” property, that means 605 of the 3,563 are either short sale or REO properties. Here is where things get interesting. As of October 4, 2012, there were over 12,600 condo-townhouse properties in some stage of foreclosure in Broward County, Florida. That means that only 5% (605) of the properties in foreclosure are on the market and available for sale. The remaining estimated 12,000 units make up the shadow inventory in the condo-townhouse market. Eventually most of those units will make it to the market in the form of a short sale or REO property. To put this in perspective, over 3x the available condo-townhouse inventory hasn’t even hit the market yet! Here is a chart outlining where the shadow inventory is located in the various cities of Broward County, Florida.
Some of the cities with the highest amount of condo-townhouse properties in foreclosure include Fort Lauderdale, Hollywood, Pompano and Coral Springs. This problem will not be going away anytime soon. New foreclosure filings in Broward County have ranged between 300-500 per month throughout 2012 and this pattern will most likely remain intact for the next few years in South Florida.