Sales activity increased as the inventory of homes and condos in South Florida dropped in April, thanks mostly to steep discounts on bank-owned properties.
The number of single-family homes and condos on the market throughout Miami-Dade, Broward and Palm Beach counties dipped by 20 percent from October 2008 to the week ending May 18. The supply shrank from 107,527 properties to 85,706, according to area multiple listing service data.
From Miami Beach condos to single-family homes in Southwest Broward, homes are staying on the market for fewer days. In April, inventory on Miami Beach shrunk to a 15-month low, triggered by a 57 percent drop in average square foot sales prices, according to MLS statistics. Single-family home prices dropped 50 percent in Miami during the same time period.
About seven out of 10 home sales in the tri-county area are distressed sales, including either foreclosures or bank-approved short sales, said Peter Zalewski, founder of Bal Harbour-based real estate consultancy Condo Vultures.
First-time homebuyers want foreclosures in decent shape that require little or no work. These properties are rare and sell fast. Some homes get a dozen bidders, Zalewski said.
“The foreclosures are selling quick,” said Marci Trautenberg, a realtor with EWM Real Estate in Miami. “If they are priced right, they are selling within a week.”
Activity in single-family home sales picked up in early May, as many renters made the choice to buy, said Maji Pace Ramos, a realtor with Coldwell Banker in Miami who covers Miami Beach, Coconut Grove, the Biscayne Corridor and Southwest Broward.
“Anything under $300,000 is moving,” Pace Ramos said.
Condos — especially discounted foreclosures selling for $200,000 less than two years ago — are going fast in places like Aventura, Sunny Isles and Miami Beach. Buyers come from northern states and from Europe. Locals seeking waterfront homes are entering the market.
A non-water view condo on Miami Beach can sell for under $300,000. Units in older buildings in North Bay Village are going for less than $100,000. “People are starting to realize this is the bottom,” Trautenberg said. “I have been saying it for a while, but I finally believe this is the time. To think, right now you can buy a condo on the beach that you couldn’t buy for the same price most other places a year ago.”
The Beach Club on Hallandale Beach has drawn many buyers in the last month.
In 30 days, sellers made 12 pending sales and one closed deal, Trautenberg said. Six were short sales, five were regular sales and there was a pair of foreclosures.
A second round of foreclosures is expected to hit starting in July, but Pace Ramos doesn’t expect those homes to stay on the market for long. “It doesn’t matter because they are going so fast, and the investors are out,” Pace Ramos said.
Homes priced from $400,000 to $1 million are selling a little more slowly, while homes above $1 million are going quickly — if they are priced right.
“For some reason, a lot of those sellers are not dropping their prices. In the luxury market, it might take a little longer for people to realize they have to drop their prices for the inventory to move,” Pace Ramos said.
Realtors expect the inventory to shrink even more if lenders begin to open financing to more potential buyers. “A 650 credit score used to be considered good, but now 750 is required by many lenders,” Zalewski said.