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Market drill down: Fort Lauderdale / Broward County condo & townhouse properties
Today we are going to explain the current condo / townhouse market conditions for the Fort Lauderdale market. The first chart shows what type of transactions are closing with data through May 2013.
You will notice from the chart that traditional sales remain as the bulk of all closings. There were 1,664 total condo/townhouse transactions in May 2013, with the breakdown as follows:
- 1,154 sales were traditional transactions, or roughly 70% of all closings
- 240 sales were foreclosure/REO sales, or 14% of all closings
- 262 sales were short sales, or 16% of all closings
Here is how the prices are shaping-up for 2013 so far:
In May, the median sale price for condo/townhouse transactions in Broward was as follows:
- Traditional sales – $122,500
- Foreclosure/REO sales – $80,600
- Short sales – $86,000
One of the largest factors contributing to the recent uptick in prices is the shrinking inventory. You will see from the next chart that the available condo/townhouse inventory available for sale in Broward County continues to bump around along the bottom and was at 5,957 units in May.
It is possible that the recent price strength will bring some sellers out of the woodwork and put their units on the market. This price strength will be temporary, because the South Florida real estate market is facing some headwinds. The first issue is the high level of shadow inventory and the next chart shows where over 14,000 existing condo/townhouse foreclosures are located throughout Broward County.
Some of the cities with the highest levels of condo/townhouse foreclosures are as follows:
- Coral Springs -1,285
- Hollywood – 1,192
- Fort Lauderdale – 1,163
- Pompano Beach -1,160
- Lauderhill – 1,140
- Tamarac – 1,009
Now let’s do some math. In our first we chart showed that there were a total of 502 distressed (combine the REO and short sales) transactions in the Broward County condo/townhouse market in May. If the monthly pace of distressed sales remained at 502, we could sell all of the 14,265 existing foreclosures in about 28 months (just over 2-years). Oh wait, we forgot to mention the pace of new foreclosures being filed……..
In May, there were 541 new condo/townhouse foreclosures filed in Broward County. In brief, the pace of distressed property sales (502 in May) is barely keeping-up with the new foreclosure filings (541 in May). Under the current conditions, the shadow inventory of foreclosures will continue to grow and we will not be able to reduce the existing overhang of distressed properties.Even more troubling is that the monthly average of new filings just in the condo/townhouse segment is 538 in 2013, up from 379 in 2012. So this is the “housing recovery” that everyone keeps talking about?