64% Of Bank-Owned Condos, Townhouses Located In South Florida Suburbs Published on 10/10/2011 9:26:00 AM
Nearly two-thirds of the sales for bank-owned condos and townhouses in the tricounty South Florida region have occurred west of Interstate 95 / U.S. 1 in the first nine months of 2011, according to a new report from CondoVultures.com.
Buyers purchased nearly 6,400 bank-owned condos and townhouses in the suburbs of Miami-Dade, Broward, and Palm Beach counties compared to 3,600 transactions near the South Florida coast, according to the report based on an analysis by the licensed Florida real estate brokerage Condo Vultures® Realty LLC.
Bank-owned condo and townhouse transactions in western South Florida traded at a median price of less than $60 per square foot between January and September of 2011, according to the analysis based on Florida Realtors association data.
Compare this to bank-owned condos and townhouses that have transacted near the coast at a median price of nearly $90 per square foot in the first nine months of the year, according to the report.
The trend of buyers purchasing bank-owned condos and townhouses in the suburbs at a faster pace than near the coast is poised to continue in the last three months of 2011.
Of the 1,700 bank-owned condos and townhouses under contract as of Oct. 10, 2011, nearly 1,100 properties are located in the suburbs west of Interstate 95 while 600 properties are situated near the coast, according to the report.
The median asking price for the pending deals in the suburbs is less than $60 per square foot compared to nearly $95 per square foot near the coast, according to the report.
Going forward, the mix of bank-owned units currently on the market breaks down to 42 percent of the properties located near the coast and 58 percent in the suburbs, according to the report.
It is unclear what impact the bank-owned condos and townhouses currently on the resale market could have on the overall deal distribution of suburbia versus the coast for future transactions as only about 800 units are available for purchase, according to the report.
Bank-owned resales – also known as Real-Estate Owned (REO) by lenders that have repossessed properties through the foreclosure process – account for 26 percent of the more than 39,200 condo and townhouse transactions that have occurred throughout South Florida in the first nine months of 2011, according to a new CondoVultures.com report.
In previous years, bank-owned condos and townhouses in Miami-Dade, Broward, and Palm Beach counties have accounted for 28 percent of the transactions in 2010 and 30 percent of deals in 2009, according to the report.
Bank-owned properties are popular with investors but the available inventory has dwindled in South Florida in the last year due in part to the administrative irregularities tied to the "foreclosure freeze."
As the number of REO properties available for purchase has decreased, investors focused on distressed residential real estate have increasingly turned to shortsales, according to a recent CondoVultures.com report.
Unlike foreclosures that can take more than 18 months to complete at significant out-of-pocket costs to the lenders, shortsales can be transacted in less than six months with expenses limited to the outstanding principal and associated fees.
Often times, shortsales generate higher average prices as distressed borrowers have incentives to maintain their properties in hopes of being relieved of a large chunk of their unpaid balances at the time of the sales.
Buyers are growing more willing to pursue shortsales as lenders have accelerated the process, reducing the necessary due diligence period by as much as half, industry watchers said.
It is important to note there are various stages to a residential real estate transaction in South Florida.
A transaction begins when a property is made available for sale and ends when a title is conveyed from one party to another party as a result of the recording of a deed with the local government.
As part of the process, a property typically goes under contract and into a due diligence phase by which a deal can be canceled.
The CondoVultures.com new condo sales report is based on completed transactions where a deed is recorded and taxes paid as a result of the sale.
Condo Vultures® LLC is a real estate consultancy and marketing company based at 1005 Kane Concourse, Suite 205, Bal Harbour, Florida, 33154. You can reach Condo Vultures® LLC at 800-750-0517.
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