Banks repossessed through foreclosure more than 7,300 properties in the tri-county South Florida region in the first three months of 2009, representing a 54 percent increase over the number of properties taken back in 2008, according to a new report from Condo Vultures® LLC.
Lenders took ownership of a combined 2,355 properties in January, 2,432 properties in February, and 2,524 properties in March in Miami-Dade, Broward, and Palm Beach counties. At this pace, more than 29,000 properties would be repossessed in South Florida in 2009, according to the Condo Vultures® report.
"We actually expect the number of REOs to far surpass 30,000 in 2009," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures®. "Now that the government and lenders appear to be poised to allow many of the holiday-inspired foreclosure moratoriums to expire, we anticipate an uptick in the number of Lis Pendens and/or Notices of Default filings in the upcoming months."
Surprisingly, Miami-Dade County, considered by many to be the hardest hit real estate market in South Florida, no longer holds the distinction of having the most bank-owned properties in the tri-county region.
Broward County, where Fort Lauderdale, Hollywood, and Pompano Beach are located, wrestled away that distinction from Miami-Dade in 2009 with a 100 percent increase in REOs.
In the first 90 days of 2009, lenders took back 3,341 properties in Broward compared to 2,691 properties in Miami-Dade. In Palm Beach, lenders repossessed 1,279 properties.
By comparison, in the first quarter of 2008 lenders repossessed 2,395 properties in Miami-Dade, 1,671 properties in Broward, and 696 properties in Palm Beach, according to the report.
To repossess a property in South Florida, lenders must first file a Lis Pendens and/or Notice of Default with the circuit court in the county where the residence is located.
The filing initiates what is typically a six to nine month process that costs a lender an estimated $40,000 to $80,000.
The final step of the foreclosure process is a courthouse auction where a lender's financing position is available for purchase by the highest bidder based on a minimum judgment amount set by the court.
Many bidders often times fail to purchase a lender's financing position on a condo, townhouse, or single-family house as the debt owed on the foreclosed property by the borrower far exceeds the amount an investor would be willing to pay in today's distressed market.
It is at this point in the foreclosure process that the court formally transfers a property from the borrower to the lender, creating Real Estate Owned (REO) by a bank.
Once in control of a property, a bank settles all outstanding title issues including past-due condominium maintenance fees before ultimately selling off the REO property at a deep discount.
"REOs offer some of the deepest discounts available in the volatile South Florida real estate market," Zalewski said. "The drawback is, many of these properties are in need of work, whether it is renovating a residence damaged by a frustrated borrower or building out a never-lived-in condo unit. Still, the potential upside is great for those buyers who are willing to put in some sweat equity."
Condo Vultures® Featured On CNBC's Squawk On The Street
CNBC's popular Steals and Deals segment featured Condo Vultures® on April 15 during the financial news network's Squawk On The Street program. The Steals and Deals segment focused on bank-owned condo units in Greater Miami that are now available at discounts as deep as 81 percent.
Miami Condo Trends Subject of Upcoming Seminar
Condo Vultures® is relaunching its seminar series on Tuesday, April 28, at the Doubletree Grand Hotel in Miami with a presentation by real estate consultant and broker Peter Zalewski. The agenda will include a discussion of proprietary research collected by Condo Vultures® regarding the South Florida condo market and the official launch of the firm's recently published eBooks, the the Official Condo Buyers Guide to Miami™ and Miami's Great Condo Crash: A Chronicle of the Boom and Bust™. For more information about attending, please visit the Upcoming Events section of CondoVultures.com.
Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com. Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™. Our new books, the Official Condo Buyers Guide to Miami™ and Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.
Copyright © 2009, Condo Vultures® LLC
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