It appears that all of the real estate market forecasters are glossing over a very disturbing sign in the South Florida residential real estate market.  As the relentless chatter on the housing recovery gets louder, the shadow inventory of foreclosures continues to grow in Miami-Dade, Broward and Palm Beach County Florida.  Today we will take a look at Miami:

There are several areas that have maxed-out with over 5,000 foreclosures in either the single-family or condo/townhouse segments and a few cities have topped-out in both!  Here is a quick summary of the chart leaders, but feel free to take a look and see where the estimated 60,000 + residential foreclosures are located in the Miami area:

• Hialeah – Over 5,000 houses and over 5,000 condo/townhouse properties are in some stage of foreclosure
• Homestead – Over 5,000 houses and 2,977 condo/townhouse properties are in some stage of foreclosure
• City of Miami – Over 5,000 houses and over 5,000 condo/townhouse properties are in some stage of foreclosure
• Miami Gardens – Over 5,000 houses and 1,327 condo/townhouse properties are in some stage of foreclosure
• Miami Beach – Currently has 2,163 houses and 3,683  condo/townhouse properties are in some stage of foreclosure
• North Miami – Currently has 2,370 houses and 937  condo/townhouse properties are in some stage of foreclosure

Those are just a few areas, but almost every city in Miami-Dade County saw an increase in shadow inventory since our last foreclosure search at the beginning of August.  The only positive right now is that the pace of new foreclosure filings has reverted to a normal pace after climbing month over month for the first half of 2013.  The problem is that these properties are not getting to the market for sale.  With such a massive backlog of foreclosures clogging the court system and the snails pace of foreclosure processing in Florida (over 900 days on average), a “quick fix” to this problem may not be very realistic.

The pace of new foreclosure filings is still more than double the rate during last year.  In 2012, the monthly average of residential foreclosure filings was 1,807 and so far in 2013, the monthly average is 3,717 through August.  Here is another chart which combines the single-family and condo/townhouse filings:

For now it appears that the pace of new filings is hovering around the 3,000 foreclosures per month, so we will have to the monitor the monthly figures going forward.  Basically, if shadow inventory continues to grow in Miami even at the moderated pace of new filings, the residential property market will get worse before it gets better.