By breaking down the residential property numbers by region, county, city and property segment, we hope to provide a better understanding of what is really happening in the housing market.  Our office gets calls daily from individuals and families wondering why they cannot find an affordable property to buy or rent in South Florida.  The following charts of the single-family home sector in Broward County should shed some light on the problem.  First-up, let’s look at the available inventory.

As of March 2013, there were only 4,226 single family homes listed for sale in Broward County, down from 6,134 in January of 2012.  That alone is over a 30% drop!  next, let’s take a look around Broward County to see where over 38,400 houses that are in foreclosure are located.  Keep in mind that our search database has a maximum of  5,000 results and that is why the City of Fort Lauderdale is “limit-up” at 5,000.

Next, let’s take a look at the new foreclosure filings in Broward County that have averaged 950 new filings per month in the single family home segment over the past 15 months.  In March you see that the number of new filings increased again and appears to be on the upswing.  This does not include the condo/townhouse market.

Finally, let’s put everything into perspective and answer the question of why people cannot find an affordable place to live in Broward County, Florida:

Out of the 4,226 houses available for sale in March, approximately 15% of them or 634 are considered “distressed” (either short sale or foreclosure).  Just take a look at how small the number of distressed properties on the market looks next to the staggering 38,400 houses that are currently in foreclosure.  The problem is that there is such a small percentage of distressed properties that are actually listed on the market.  The supply shortage is in direct correlation to the slow foreclosure process in Florida, where the average foreclosure takes 853 days to complete.  There are plenty of qualified buyers and renters who would love to occupy these properties (and actually pay to do so) but are unable to because they are currently vacant, occupied by squatters, or occupied by people who simply can’t or won’t pay to do so.

Most people think this is a demand driven rally in the housing market, but it is more a factor of restricted supply.  It has created a very difficult situation for renters and has led to a drastic increase in rental rates across South Florida.  Over the next few years there will be thousands of new rental units being built in the area.  A combination of added rental supply and more distressed sales will eventually ease the pricing pain being experienced by renters (and buyers), but it won’t occur until mid-2014.

Finally, there is some light at the end of the tunnel.  March showed a slight increase in short sale transactions being completed in Broward County.  With a total of 411 distressed sales in March (Combining REO and short sales), it will only take 93 months to dispose of the 38,400 houses that are currently in foreclosure in Broward County.  Almost 8 years?  Oh wait, we are forgetting to add back the on average 950 new single family  foreclosures being added each month.  Wow, I guess we will be dealing this for awhile, because at that rate, the monthly distressed property sales aren’t even half of the new foreclosures entering the court system.