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South Florida residential property sales, inventory and breakdown by transaction type

After a slight dip in January, the average selling price of South Florida residential properties increased in February.  The average selling price of a single family home in South Florida (Miami Dade, Broward and Palm Beach) increased to $336,516 and the average selling price of a condo/townhouse property for the same period increased to $225,673.

Meanwhile, the overall trend in the inventory of properties available for sale continues to to bump along the record low levels for the South Florida market.  There were only 37,884 residential properties available for sale in February.  That figure is comprised of 16,355 single family homes and 21,529 condo/townhouse properties available for sale.  Inventory in the South Florida residential property market has basically been cut in half from January 2011 when inventory was at 72,241 residential properties available for sale.  Keep in mind that foreclosures were halted with the robo-signing litigation in October of 2010, hence the gradually decline in the residential inventory.  The chart below shows the gradual trend lower over the past few years.

Next, let’s take a look at the breakdown of the single family property sales by transaction type.

In February 2013, the breakdown of single family home sales were as follows:

  • approximately 64% were traditional / arm’s length transactions
  • 14% were bank foreclosure/REO sales
  • 22% were short sales.

As far as the condo/townhouse sales in February:

  • 69% were traditional, arm’s length transactions
  • 14% were bank foreclosure/REO sales
  • 17% were short sales

At Allied Realty Group, we predict that banks will ramp-up their short sales and foreclosures over the next few years and distressed transactions will continue to increase now that all of the robo-signing litigation has been settled.   It is important to keep in mind that Florida is a judicial state and it takes on average over 800 days to complete a foreclosure in this state.  A few months ago, “Loki Boy” made national headlines by squatting in a Boca Raton mansion by utilizing the antiquated adverse possession law.  That woke up South Floridians and now the neighboring cities are beginning to pay attention to the growing number of squatters.  The crazy part is that there are tens of thousands of “Loki Boys & Girls” who knowingly haven’t made a mortgage payment in several years and who are essentially squatting in their houses and condo/townhouses.  The bottom line is that South Floridians have learned to milk the system by playing “Beat the Bank”.  The property dweller hears stories of their neighbors not making mortgage payments for 3-4 years and with the aid of an attorney, they are able to game the system for years and the 800+/- days Florida average for a foreclosure is merely the half-life of their free stay.  To put the backlog of foreclosures into perspective, here is a chart from Zerohedge with Realtytrac foreclosure data as of January 2013.  Click on the chart for better clarity and you will notice the dramatic dropoff in foreclosure activity once foreclosures were halted by the robo-signing litigation in October of 2010.  We will continue to monitor the new foreclosure filing data for the South Florida market and graph the trends for our readers.