Month after month we have witnessed the available residential inventory decline and witness the impact on the South Florida housing market. I have the recent inventory numbers, along with some new figures that put everything into perspective. First, a quick glance at the single family home inventory figure and the month over month decline since foreclosures were halted back in October 2010. In September 2010, the Greater Fort Lauderdale market had 6,451 single family homes listed for sale. Foreclosures were halted the next month and that inventory figure has dwindled to a mere 2,878 properties on the market in September 2012.
In a similar chart, the condominium market has also seen a gradual decline over the past two years. In September 2010, the Fort Lauderdale area had 8,696 condo properties available for sale. Banks halted foreclosures the next month and as of September 2012 there are only 3,586 condo & townhome properties available for sale.
So where is all of the inventory? To make things easier, I have broken it down city by city throughout Broward County, Florida.
Before I itemize some of the South Florida cities with the largest amount of foreclosures, it is important to give the grand total: As of October 4, 2012 there are over 34,000 single family homes (over 10 times what is currently on the market) and over 12,000 condo / townhome properties in some stage of foreclosure in Broward County, Florida (approx 3.5 times what is currently on the market). Some cities with a large balance of foreclosures are:
- Fort Lauderdale – 3,842 single family and 1,050 condo / townhomes in foreclosure
- Miramar – 4,258 single family and 817 condo / townhomes in foreclosure
- Pembroke Pines – 3,703 single family and 842 condo / townhomes in forecolsure
- Hollywood – 3,016 single family and 1,010 condo / townhomes in forecolsure
Those are just a few of the top cities. Feel free to peruse the chart to see where the various cities rank on the list. What you need to keep in mind is that these properties will eventually make it to the market and be sold either as a short sale or REO property. My predicition is that it will take at least the next few years to take a chunk out of the shadow inventory. Why do they call it “shadow inventory” ? Because we can’t see it. It is not on the market with a sign in the yard. In sunny South Florida, people usually reside in their foreclosed property for 2-3 years without making payments before they have to move. So hopefully this explains the month over month decrease in available properties for sale in South Florida, and these charts hopefully illustrate that housing has not recovered in South Florida, the problem has swelled to an absurd level. The major banks and the federal government have merely kicked the can down the road with the foreclosure mess as the problem continues to grow. Finally, here is a chart of the monthly new single family and condo foreclosures filed in Broward County, Florida:
There was a significant dip in the new filings for September, but I am confident these filings will creep right back up to the levels seen earlier this year once the foreclosure machine gets ramped-up again in October. So when people say that the South Florida housing market is recovering….don’t believe the hype! Until the shadow inventory is cleared, we will not have a sustained recovery in the South Florida residential property market. Finally, shadow inventory is going to be problematic on a national scale and will not going away anytime soon, as you will notice from the last chart below from Bloomberg.
Allied Realty Group is located in Fort Lauderdale, Florida. Our residential brokerage team serves as the exclusive broker for a variety of financial institutions in the management and sale of distressed single family and multi-family properties. Our team will inspect, repair, market and dispose of REO properties in a manner that mitigates bank losses.
Allied Realty Group’s REO assignment territory is Broward County, Florida and we complete broker price opinions (BPO’s) for banks on a daily basis. All of our residential brokerage clients appreciate our extensive market insight since we are actively visiting properties and preparing accurate valuations for asset managers.