After seeing several months of declining inventories and a brief uptick in prices, it appears that we are now witnessing the direct impact of more distressed sales finally reaching the market.  That’s right, prices are once again under pressure even with declining inventories.  I have talked for months on how the short-lived uptick in prices would not last, and here is the proof.  Let’s first look at the single family housing inventory numbers for Miami, Ft. Lauderdale and Palm Beach Florida:  After peaking in August 2010 with 20,379 single family homes listed in the mls, the July inventory has slipped to only13,030 homes listed for sale.

The condominium and townhome inventory for the same geographic area continues to slide as well.  In August 2010 there were 31,526 condos & townhomes listed for sale in the tri-county area.  As of July 2012, there were only 14,459.

Now, here is where things get interesting.  Until June 2012, the single-family and condo/townhome markets in South Florida were feeling the impact of reduced supply resulting in higher prices.  I kept mentioning in my blog posts that this would be short-lived.  After all, the South Florida housing market will be facing downward pricing pressure for at least a few more years.  Take a look at the single family average selling price below.

Wow, that’s pretty interesting isn’t it?  From June to July 2012 the average selling price for a single family home in South Florida dropped from $336,000 to $303,000. That’s almost a 10% drop in one month.  My guess is that after the robo-signer settlement was finally executed by all parties in March, they largest banks quickly approved short sales that had been tied up for months.  Next, take a look at the chart for condo/townhome prices.

In June, 2012 the average selling price for a condo-townhome in South Florida  was $226,000. In July, the average price dropped to $199,000.  That’s just about a 12% drop in one month!  Now we are having some fun.

When inventories were dropping month over month and we were seeing the lack of supply driving prices up, I equated that to the click…click….click that you here when a roller coaster climbs.  We all know what happens on the other side of that climb, so hold on to your hats and feel free to raise your hands in the air.  I think that the new home sales data (thanks to Zerohedge for the chart) is reflective of what will happen to the existing home and condo sales data once the 1-2 punch of increasing supply and distressed sales hit the market.

Regardless of what the headlines say, the charts don’t lie!

Various trade groups and periodicals have called several “housing bottoms” since the market crashed back in 2008.  Thanks to constant meddling by the government and litigators, that rather elusive “housing bottom” is still a few years away, so you can stop chasing it for now or you will look like a fool just as they do.

Allied Realty Group is located in Fort Lauderdale, Florida.  Our residential real estate 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 comprehensive valuations for asset managers.