South Florida Governments Plan To Buy $80 Million Worth Of Distressed Properties

Opportunistic buyers scouring the South Florida market for deeply discounted residential property deals will shortly have to deal with yet another competitor: local government.

The governments of Miami-Dade and Broward counties have compiled a combined $80 million to spend on bank-owned properties in South Florida. The governments plan to spend the money purchasing, renovating, and then either renting out or selling off the properties.

Miami-Dade government has created a $62.2 million pool to purchase distressed residential properties in the devastated real estate market of Florida’s most populous county, according to the Miami Herald.

Miami-Dade plans to use the money to acquire and renovate foreclosed properties in the central and southeastern parts of the county. Once the properties can be made marketable, the county would then either sell off or rent out the residences.

The county plan calls for using $26.6 million to buy troubled apartment buildings and $10 million of the capital to purchase bank-owned properties. An additional $1 million has been set aside to tear down about 80 delapidated structures.

''We're figuring we can get the biggest bang for our buck if we utilize the money for rentals because we can house the most people that way faster,'' Miami-Dade senior advisor Cynthia Curry told the Miami Herald.
Miami-Dade’s investment pool is being created with grant money provided under the federal government’s $4 billion neighborhood stabilization program that was passed by last summer by Congress.

Broward County, where Fort Lauderdale is located, has received $17.7 million for the program. Florida counties received a combined $541 million, according to the article.

South Florida’s county governments will have plenty of product to choose from once they begin purchasing bank-owned properties.

Lenders repossessed an average of 69 homes a day in South Florida in the first nine months of the year, according to a new report from Condo Vultures® LLC.

At that pace, the number of bank-owned properties in South Florida is skyrocketing, increasing by 134 percent to 7,100 properties in the third quarter and by 190 percent to 18,960 homes for the year, according to the report by the Bal Harbour, Fla.-based consultancy.

A year ago in 2007, lenders took back 3,035 properties in the third quarter and 6,545 properties in the first nine months of the year, according to Condo Vultures®.

On a geographical basis, Miami-Dade County accounts for 46 percent of the bank-owned properties repossessed in the tricounty South Florida region in 2008.

Broward County represents 39 percent of the total REO inventory for 2008, and Palm Beach County the remaining 15 percent, according to the report.

Miami-Dade County had 8,656 bank-owned properties in the first nine months of this year, up 188 percent compared to the 3,009 REO properties during the same period in 2007, according to the report.

Broward County ranked second with 7,370 bank-owned properties through the first nine months of 2008, compared to 2,339 foreclosed properties in 2007. Palm Beach County was third in the tricounty region with 2,934 REO properties in 2008 compared to 1,197 properties in 2007, according to the report.

“Miami-Dade County experienced a spike in foreclosure actions in 2007 that eventually became bank-owned properties in 2008,” said Peter Zalewski, a principal with Condo Vultures® LLC. “Given the current surge in foreclosure actions in Broward and Palm Beach counties right now, we would expect the number of bank-owned properties to spike in these two counties in 2009.”

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. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

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