South Florida Bank-Owned Properties Spike 228% In Second Quarter

As federal regulators attempt to sell off assets from the failed IndyMac Bank, the number of bank-owned properties in South Florida has spiked by 228 percent in the second quarter of 2008, according to a new report from Condo Vultures® LLC.

Nearly 7,100 South Florida properties were repossessed by banks - also known in the banking industry as Real Estate-Owned (REO) properties - between April and June of 2008, compared to 2,167 properties for the same period in 2007, according to the

The second quarter activity pushed the total number of court-ordered repossessions in South Florida for the year to 11,860 properties compared to 3,510 in the first half of 2007, representing a 238 percent increase.

On a county-by-county basis, the greatest concentration of REOs is located in Miami-Dade County where 5,370 properties were repossessed by banks in the first half of 2008. By comparison, 1,665 Miami-Dade properties were repossessed in 2007, which represents a 223 percent increase on a year-over-year basis.

In Broward County where Fort Lauderdale is located, lenders repossessed 4,746 properties in the first half of 2008, up 324 percent from the 1,119 REOs in the first half of 2007.

Palm Beach County is experiencing the smallest increase in REOs with the first half total increasing only 140 percent to 1,744 in 2008 compared to 726 for the same the number of months in 2007, according to the report.

Banks generally attempt to unload newly transferred REOs quickly as the institutions are responsible not only for the upkeep of the property but the monthly expenses, including homeowners association dues, special assessments, and property taxes. These expenses are in addition to the $40,000 to $80,000 that lenders spend during the six to eight month foreclosure process to repossess a property.

Peter Zalewski is a principal with the consulting company Condo Vultures®LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report.

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