Although foreclosures and so-called short sales still account for a large part of the region’s housing market, the numbers are declining. Distressed sales made up 48 percent of all sales in October, down from 54 percent in October 2010, according to the Miami Association of Realtors. In Palm Beach County, distressed sales represented 23 percent of all transactions last month, compared with 27 percent in October 2010.
Fueling the decline has been a surge in South Florida home sales that is helping shrink the available housing stock, including the number of properties in some stage of foreclosure. Those properties have weighed down the beleaguered housing market the past four years. Weston’s housing market has been especially robust. There are only 10 bank-owned homes on the market in the entire city, said Chip Rowand, a broker for the Keyes Co. in Weston. Bidding wars are common there. “The days of coming in 20 percent under asking price are gone,” he said.
Since President Barack Obama took office in early 2009, the upscale enclave west of Fort Lauderdale has led the nation with the highest increase in home values, according to one research firm. The median value of a home in Weston climbed 15.1 percent to $280,000 from February 2009 to August 2011, according to a survey of the nation’s 1,000 largest cities by Zillow.com for Bloomberg Businessweek. Other communities also are reporting positive price trends.
In the Shadow Wood subdivision of Coral Springs, Beverly Rothstein of the Christopher White Group listed for sale a four-bedroom home next to a run-down foreclosure. Regardless, Rothstein’s client had an offer within a week for near the $305,000 asking price — even without a for-sale sign in the front yard. The deal closed last month.
Another of her clients, Erwin Sefton, sold his three-bedroom Coral Springs home in three weeks for $245,000. He’s moving to a new house near Boynton Beach that won’t be ready until January, and his only disappointment is that his house sold too quickly. “Everybody I talked to said it would take at least six months,” said Sefton, 67. With buyers attracted to affordable prices, sales of existing homes and condominiums have soared in 2011.
Palm Beach County easily will surpass last year’s total of 9,584 home transactions. Broward County already has eclipsed last year’s home sales total of 7,997. Condo sales in both counties this year already exceed the annual totals from 2005, the peak of the housing boom. Lenders are starting to resume foreclosures that had slowed dramatically in the past year amid the “robo-signer” controversy.
Some real estate agents and analysts believe these imminent foreclosures make up a “shadow inventory” that threatens to hurt the budding housing recovery. Others are skeptical, saying the onslaught of foreclosed homes predicted for the past two years hasn’t happened yet and won’t be as bad as feared. “Banks are handling the disposition of distressed properties better,” said Bill Richardson, president of the Realtors Association of the Palm Beaches. “I don’t think we’ll see any significant price deterioration from where we are now.” But that doesn’t mean neighborhoods hit hard by properties in the foreclosure process won’t face price declines in the months ahead.
Del DeMarino wants to move closer to the ocean, so he put his four-bedroom home with a pool in Coral Springs on the market for $319,900. When he dropped the price by $10,000, he immediately had four offers. It’s now under contract for the asking price, and he expects to close next month. There are dozens of homes in his Maplewood subdivision that are in or near foreclosure, said Michael Citron, his real estate agent. Without that drag on the market, DeMarino easily could have netted 15 percent more for his house, Citron said. “The foreclosures and short sales are definitely still a factor,” DeMarino said. “You’ve got to price it right if you want to sell it.”