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Where is the residential inventory? A glance at Miami-Dade, Broward and Palm Beach foreclosures by city.

For over two years, we have been witnessing the steady decline of residential property available for sale in South Florida.  The inventory of available single-family and condominium properties has dwindled to record low levels, and most media outlets have ignored the reason.  There is a simple answer to all of this, and it lies in the next few charts outlining the foreclosed properties that are stuck in “purgatory”.  Many of these properties have been in various stages of foreclosure for the past 3-4 years, and haven’t been placed on the market, therefore preventing the market from correcting and establishing the necessary base for a true recovery.  These properties include property owners who have defaulted, underwater borrowers hoping for a modification, people looking to short-sell their home or condo, and borrowers how quite simply don’t pay their mortgage and after a few years of squatting in the property, will eventually leave once their time runs out (upwards of 1,000 days in judicial states like Florida).  At some point, these properties will need to enter the marketplace and be sold.  Once this shadow inventory is finally cleared, the South Florida residential real estate market will have the foundation for a recovery.  First, let’s take a look at the existing foreclosures in various cities throughout Miami-Dade County:

Hialeah, Homestead and Miami Beach top the list of the largest amount of properties in foreclosure.  You will see that Miami Beach has more condominium properties in foreclosure than other areas.  Also, for the downtown/Brickell area I just used 3 zip codes (33131,33132 and 33137) since a foreclosure search for the City of Miami returns well over 5,000 records.

Next we head North on I-95 to Broward County, Florida where as of October 4, 2012 there were over 34,000 single family homes and over 12,000 condo /townhome properties in some stage of foreclosure.  take a look:

The City of Fort Lauderdale had 3,842 single family homes and 1,050 condo/townhome properties in foreclosure in early October.  Some other areas with a high foreclosure rate are Miaramar, Pembroke Pines and Hollywood.

Finally, Palm Beach County:

Some people may be surprised that Boca Raton has about 1,500 homes and 600 condo/townhomes in foreclosure.  Boynton Beach, Lake Worth and the City of West Palm Beach also top the list.

My prediction is for the foreclosure inventories  to remain elevated for several years.  The majority of the properties in these 3 charts will eventually enter the market as either a short sale or REO property.  Until then, we will continue to see inventories drop.  Once we have the September numbers on new foreclosure filings, I will post them on the blog.