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South Florida REOs Jump, But Inventory Has Begun to Dwindle

Lenders took back 7,300 foreclosed properties in the tri-county South Florida area during the first quarter of the year - representing a 54 percent increase over the same period in 2008 - according to a ""new report"":http://www.condovultures.com/images/stories/vdreports/april2009/cv_reo_report_q1_2009.pdf from ""Condo Vultures LLC"":http://condovultures.com/, which provides residential real estate data for some of the markets hardest hit by the housing crisis, including South Florida, Las Vegas, Los Angeles, Phoenix, and San Diego.
But offering a glimmer of hope for the South Florida housing market, Condo Vultures also ""reported"":http://www.condovultures.com/images/stories/vdreports/april2009/cv_active_pending_sales_inventory_04_13_09.pdf that inventory levels dropped by 1,000 residences last week in the region. The company said that boost in sales in Miami-Dade, Broward, and Palm Beach counties dwindled the area's total resale inventory for condos, townhouses, and single-family homes by one percent, to 91,820 properties on the market. In addition, Condo Vultures reports that pending sales transactions are up this week, which could produce more promising stats. At the end of the first quarter, the company said, there were 94,526 resales on the market.
Back to the first quarter REO numbers, Condo Vultures' report showed that lenders reclaimed 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, the company says, more than 29,000 properties will be repossessed in South Florida in 2009.
Peter Zalewski, a principal with the Bal Harbour, Florida-based Condo Vultures, said, ""We actually expect the number of REOs to far surpass 30,000 in 2009. 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.""
Miami-Dade County has been considered the hardest hit hosuing market in South Florida, but according to Condo Vultures, it no longer holds the distinction of having the most bank-owned properties in the tri-county region. The company said Broward County, where Fort Lauderdale, Hollywood, and Pompano Beach are located, now holds that title, having experienced a 100 percent increase in REOs during the first quarter of the year.
According to Condo Vultures' report, banks took back 3,341 properties in Broward in Q1, 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 reclaimed 1,671 properties in Broward, 2,395 homes in Miami-Dade, and 696 in Palm Beach, the report said.
Condo Vultures explained that the repossession process is typically a six to nine month ordeal that costs a lender an estimated $40,000 to $80,000.
According to Zalewski, REOs offer some of the deepest discounts available in the volatile South Florida real estate market. ""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,"" he said. ""Still, the potential upside is great for those buyers who are willing to put in some sweat equity.""

About Author: Carrie Bay

Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.
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