The inventory of available homes for sale continued to drop in the Greater Fort Lauderdale area. As of November, there were only 2,849 single family homes listed for sale.
After reaching a high of 6,451 homes listed for sale in September 2010, the available homes for sale has declined month over month. It is important to keep in mind that foreclosures were halted in October 2010 for the robo-signing litigation and that is the main reason that new inventory hasn’t entered the marketplace. As the distressed properties were sold into early 2011, they were never replaced by new foreclosures. That will most likely change in 2013, but the distressed property chart below illustrates the gradual decline in available and closed short sale and REO properties.
November 2012 showed a drop of 3% from October in the percentage of closed transactions that were distressed sales.
- Active distressed sales were 51% of all listed homes in May 2010 and only 21% in November 2012
- Closed distressed transactions were 36% of home sales in January 2010 and only 14% in November 2012
You would think that the average selling price would increase more with such a low supply of inventory, but that has not been the case in the Greater Fort Lauderdale single family home market.
With record low inventory, the price increases haven’t followed the trend. In November 2012, the average selling price in the Fort Lauderdale / Broward County area still remained below $300,000 at $299,313. The steady dose of short sales have managed to suppress prices and will continue to do so for the next few years. We may see a month or two of gains, but prices will continue to remain under pressure until the shadow inventory of distressed properties are liquidated. So where are these properties that make up the shadow inventory?
As of November 19, 2012, there were a total of 35,039 single family homes in the cities listed above that were in some stage of foreclosure. To put things into perspective:
- 35,039 single family homes currently in the foreclosure process
- There were only 2,849 houses listed and available for sale in November
- 21% of those properties are considered “distressed” so lets say 598 properties for discussion purposes
- Let’s subtract 598 from 35,039 = 34,441 homes in foreclosure, but not listed for sale
In summary, with 34,441 homes that are sitting in “purgatory” or the “shadow inventory” that is 12 times the amount of available homes currently listed for sale (2,849). As a judicial state, it takes several years for a lender to have their foreclosure processes through the court system and many of the properties listed above received their first foreclosure notice / lis pendens as far back as 2009. For anyone to say that the South Florida housing market is in a “recovery”, they clearly haven’t done their homework!