The monthly foreclosure filings throughout South Florida remain elevated through October 2012, as available inventory continues to slide to new lows. The first chart shows the monthly new foreclosure filings in Miami-Dade, Broward and Palm Beach County.
As you will notice from the chart, all three counties have monthly foreclosure filings over 1,000 homes and condo units. Miami- Dade had almost 2,000 (1,977 to be exact) new foreclosure filings in October, while Broward had 1,187 and Palm Beach had 1,036.
Next, let’s take a look at the inventory of available properties for sale.
As the single-family home inventory has continued to drop to only 12,535 units available for sale, we finally saw a slight uptick in the available condo/townhouse properties available for sale (14,705 in November up from 14,394 in October). I always say that one month of data does not make a trend, so will will continue to monitor the available condo/townhouse inventory figures.
Now here is where things get interesting. In November we saw a divergence in selling price trends when analyzing the single-family and condo/townhouse data.
The average selling price for a single-family home jumped to $327,000 in November, while the average selling price for condo/townhouse properties in South Florida dropped to $217,000. This is very simple to explain: Supply and Demand. As the available inventory in the condo/townhouse market increased, sale prices dropped and as the single family home inventory dropped, prices spiked.
There may be a rush to complete short sales until the end of 2012 in anticipation of the Mortgage Debt Relief Act of 2007 expiring at the end of the year. If this Act is not extended, borrowers will be taxed on the difference between what is owed on their property and what it is actually sold for in a short sale or foreclosure. The expiration of this Act may have rushed some additional condo/townhouse properties to market hoping to sell by year end. Also, banks have been encouraged to complete short sales rather than foreclosures as part of the robo-signing settlement earlier this year. As we enter 2012, banks will continue to file foreclosure actions and a high rate in South Florida. Their first choice is to complete a short sale, but in the cases where they are unsuccessful, the lender will resort to foreclosure and sale of the property as and REO transaction.