Miami Foreclosures: The Facts

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There has been much talk in the press lately of a rebound in the housing market. According to the most recent RealtyTrac report, while several states indicated a remarkable improvement for the first six months of 2009 over that of 2008, Florida is up a whopping 42 percent in the number of foreclosure filings in 2009 over 2008.

So what is the story in Miami? Although we have seen a decrease in monthly foreclosure filings since peaking at 7,103 in March 2009, we are up a significant 38 percent, at 34,679 foreclosure filings for the period of January through June 2009, versus 25,117 foreclosure filings for the same period in 2008. The good news is that our local real estate market has definitely improved and that pending sales continue to increase month after month.

Basically, we are in a two-tiered market -

1st Tier -  A horde of cash buyers and investors aggressively chasing distressed properties priced at under $150,000. Properties are being slowly released by lenders to the open market. Often the original asking price is purposefully priced low to generate lots of attention and multiple offers. The pipeline is full as tens of thousands of bad assets need to be foreclosed on and moved off bank’s balance sheets.

2nd Tier – A narrow field of interested parties kicking the tires and looking for a substantial discount off asking price, and the higher the asking price, the more pressure to discount. A number of these cautiously “optimistic” buyers are paying in cash, but many are also looking to leverage and take advantage of historically low mortgage rates. We are seeing more high-end deals closing, which is encouraging. However, there remains this “mystery” of the luxury condo shadow inventory of bank owned properties. It’s out there and perhaps more pervasive than what most recognize.

So the big question is – where are we headed in Miami?

Until these foreclosures are turned over and mortgages become more readiliy available, I think that we will remain in a two tier market for foreseeable future. There will be continued competition in the lower tier, while the upper tier is going to have to discount considerably to attract a ready, willing and able buyer.

If you would like any additional information on distressed real estate opportunties in Miami, please send us an email at info@miamiangelproperties.com.

Disclaimer: The above mentioned foreclosure statistics for Miami are supplied by the Clerk of the Courts, Miami Dade County, Mortgage Foreclosure Statistics.

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