New Foreclosure Filings Plummet 51% In South Florida Market In Q3 2013 Published on 10/6/2013 3:02:00 PM
Less than 6,500 foreclosure actions were filed in the tricounty South Florida region of Miami-Dade, Broward, and Palm Beach in the third quarter of 2013, representing a 51 percent decrease in notices of default initiated on a year-over-year basis compared to the 13,200 actions during the same July through September period in 2012, according to a new report from CondoVultures.com.
The decrease in foreclosure filings in the third quarter of 2013 means more than 380,000 notices of default - the first step in the repossession process - have been initiated in the South Florida region of Miami-Dade, Broward, and Palm Beach counties since the real estate crash began in 2007, according to the report based on the Condo Vultures® Foreclosure Database™.
In the third quarter of previous years, the number of foreclosure filings in South Florida has fluctuated with more than 9,700 actions in 2011, more than 13,900 actions in 2010, nearly 23,300 filings in 2009, more than 17,900 actions in 2008, and less than 11,700 filings in 2007, according to the report based on filings with the Clerks of the Court for each respective county.
"New foreclosure filings dropped notably in South Florida in the third quarter of 2013," said Peter Zalewski, a principal with the Greater Downtown Miami-based real estate consultancy Condo Vultures® LLC. "It is unclear if this decrease in new foreclosure filings is an anomaly or the start of a new trend in South Florida. As the tricounty region's real estate market shows more and more signs of recovering, various options are becoming available for property owners who are behind on their mortgages."
At the current pace of foreclosure actions in the first three quarter of 2013, South Florida could experience less than 45,000 filings in the year 2013.
By comparison, lenders initiated more than 50,300 foreclosure actions in 2012, nearly 34,100 filings in 2011, more than 57,600 actions in 2010, nearly 98,300 filings in 2009, more than 75,700 actions in 2008, and nearly 33,200 filings in 2007, according to the data.
CondoVultures.com is scheduled to profile condo trends in the third quarter of 2013 in the 10 largest coastal markets in the tricounty South Florida region of Miami-Dade, Broward, and Palm Beach counties beginning the week of October 14, 2013.
The Condo Vultures® Market Intelligence Report™ is scheduled to publish a 10-part weekly series that analyzes the markets of Greater Downtown Miami, South Beach, Bal Harbour / Surfside / Bay Harbor Islands, Sunny Isles Beach, Aventura, Hollywood / Hallandale Beach, Downtown Fort Lauderdale and the Beach, Pompano Beach, Boca Raton / Deerfield Beach, and Downtown West Palm Beach and Palm Beach Island.
In South Florida in the third quarter of this year, Broward posted the greatest number of new foreclosure actions with more than 2,900 filings initiated in 2013 compared to nearly 4,900 filings a year earlier in 2012. In Miami-Dade, more than 2,250 filings were initiated between July and September of 2013 compared to about 5,325 actions in the same three-month period in 2012. In Palm Beach, more than 1,300 filings were initiated in the third quarter of 2013 compared to nearly 3,000 filings during the same three-month period in 2012, according to the data.
Administrative irregularities - dubbed "robo-signers" - in the repossession process first surfaced in late September 2010, creating a "foreclosure freeze" that prompted many lenders to slow the number of defaults being initiated against borrowers in South Florida between October and December 2010 compared to the same three-month period in 2009.
The slowdown in the foreclosure filing process continued throughout 2011.
In February 2012 after months of negotiations, the nation's five largest mortgage servicers reached the National Mortgage Settlement Agreement with the federal government and the attorneys general from 49 states to provide at least $25 billion in relief to borrowers.
The settlement agreement incentivizes the mortgage services to consider various options – including principal reductions, mortgage modifications, and shortsales - before filing to foreclose on borrowers who owe more than their residences are worth currently, according to the agreement.
Buyers purchased 45 percent fewer condos and townhouses as shortsales in Miami-Dade, Broward, and Palm Beach counties in the third quarter of 2013 on a year-over-year basis compared to the same July through September period in 2012, according to an analysis by the licensed Florida brokerage CVR Realty™.
As of October 1, 2013, about 1,380 condos and townhouses are on the resale market as shortsales in South Florida while an additional 4,900 shortsale units are under contract waiting to transact, according to the report based on Florida Realtors association data.
Shortsale units currently represent less than seven percent of the total condo and townhouse inventory available for resale in South Florida, according to the data
As the volume of shortsales on the resale market shrinks, an increasing number of developers are proposing new condo projects for South Florida.
As of October 3, 2013, at least 171 new condo towers with nearly 22,500 units are proposed, planned, under construction, or recently completed in the tricounty South Florida region of Miami-Dade, Broward, and Palm Beach, according to the Preconstruction Condo Projects Database™ compiled by the licensed Florida brokerage CVR Realty™.
Some six years after the South Florida real estate crash began in 2007, two new condo projects - 23 Biscayne Bay and 4001 North Ocean - have already been completed in the tricounty region and 40 other highrises - Aventura's Bellini At Williams Island, Echo Aventura (two towers), and Marina Palms Yacht Club & Residences (two towers); Fort Lauderdale's Adagio Residences; Greater Downtown Miami's 1100 Millecento Residences, Brickell Citycentre (two towers), BrickellHouse, Habitat II, ICON Bay, MyBrickell, Nine At Mary Brickell Village projects; Hallandale Beach's Beachwalk; Hollywood's Apogee Beach, Costa Hollywood (two towers), H3, Sage Beach (two towers); Key Biscayne's Oceana (two towers); Miami's Baltus House in the Morningside area and Grove At Grand Bay (two towers) in Coconut Grove; Miami Beach's 321 Ocean Drive (two towers), Faena House, One Ocean (two towers), Peloro Miami Beach, and Residences At Miami Beach Edition; and Sunny Isles Beach's 400 Sunny Isles (two towers), Chateau Beach, Jade Signature, Mansions At Acqualina, Porsche Design Tower, and Regalia - are under construction as the post-crash development era gains momentum, according to a CondoVultures.com report.
The push for new condo construction comes as the boom-era unit inventory is dwindling in South Florida.
Fueled by investors primarily from overseas, about 1,925 new condo units remain unsold from a supply of nearly 49,000 units created since 2003 in South Florida’s seven largest coastal markets of Greater Downtown Miami, South Beach, Sunny Isles Beach, Hollywood / Hallandale Beach, Downtown Fort Lauderdale and the Beach, Boca Raton / Deerfield Beach, and Downtown West Palm Beach and Palm Beach Island as of June 30, 2013, according to a recent CondoVultures.com report.
The total number of unsold new condos does not include any of the more than 8,000 units that were purchased in bulk transactions by investment groups that plan to one day resell the units at a premium, according to the Condo Vultures® Bulk Deals Database™.
A number of the newly proposed condo units are not expected to be completed until 2014 when the unsold developer inventory from South Florida's last real estate boom and bust is projected to be sold.
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 in the 225 Midtown Building at 225 NE 34th St., Suite 209B, Downtown Miami, Florida, 33137. Condo Vultures® LLC can be reached at 800-750-0517.
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