Banks repossessed an average of 4,000 South Florida properties a month in the first half of 2010, up 83 percent from the first half of 2009, according to a new report from CondoVultures.com.
"South Florida's real estate market is at a crossroads," said Peter Zalewski, a principal with the Bal Harbour-based real estate consultancy Condo Vultures LLC, in a news release. "The number of bank repossessions in 2010 is higher than at any time in at least two decades. This additional bank-owned inventory will undoubtedly be coming onto the resale market in the near future as discounted REO product.
The question is how much pressure the repossessions might put on housing prices.
Miami home prices continued to slip between March and April, according to the latest Standard & Poor’s/Case-Shiller Home Price Indices report.
Only Miami and New York saw declines among the 20 cities in the index, which is seen as a leading measure of U.S. home prices.
Condo Vultures said Miami-Dade County led the surge in bank repossessions, experiencing a 125 percent spike on a year-over-year basis. Palm Beach experienced a 112 percent jump, while Broward repossessions increased 42 percent, according to the report based on circuit court records from Miami-Dade, Broward and Palm Beach.
At the current pace, nearly 50,000 properties would be repossessed in South Florida in 2010, which would outpace the modern day high of 30,400 in 2009, Condo Vultures reported. Just three years ago, only 10,100 were repossessed.
There is some bright news, through.
"The flip side is the number of new foreclosure filings in South Florida is down 34 percent in the first half of the year, putting the region on pace for less than 70,000 actions in 2010, compared to 97,000 in 2009," Zalewski said.
Hopefully, that will decrease the rate of repossessions in upcoming months, although there is often a significant time lag between initial foreclosure filings and final foreclosures.
Despite the spike in repossessions, bank-owned properties still represent only about 6 percent of the 67,000 residences on the resale market in the three-county region as of July 12, according to Condo Vultures.
South Florida's residential inventory has increased on a weekly basis for five of the last six weeks, representing a 2.7 percent jump in available product since May 31, Condo Vultures said. Still, the overall resale inventory is down more than 37 percent from November 2008, when there were nearly 108,000 residences available in South Florida, according to Condo Vultures Realty.
In May, sales of existing, single-family homes rose in Miami and West Palm Beach, but slid in Fort Lauderdale, according to statistics from Florida Realtors. At the same time, the median sales price in all three counties ticked up.
Figures for July have not yet been released.
Market conditions aside, another key reason the number of bank repossessions has increased this year is the implementation of a new online auction technology being used by the South Florida circuit courts to clear the backlog, Condo Vultures said.
To read the full report, click here.