The substantial price gains in South Florida home sales last month may come as some surprise, but according to the Miami Herald, they can be attributed almost entirely to the foreclosure lag.
As The Real Deal previously reported, statewide sales prices for existing homes increased 2 percent, Miami condominium prices gained 13 percent and Fort Lauderdale condos and houses jumped 5 and 6 percent, respectively.
But those price gains may be a result of a sharp decline in supply, caused by the backlog of foreclosures in the area. Since the robo-signing scandal, processing times have increased tremendously.
“These foreclosures aren’t going to go away — they’re going to be settled one way or the other,” said Jack McCabe, CEO of McCabe Research and Consulting in Deerfield Beach. “The robo-signing has significantly slowed the foreclosure process, but we’re already seeing a change around the state and the nation. Foreclosures were up nationwide about 33 percent last month.”
The number of homes on the resale market dropped from 25,679 last August to 15,405 last month in Miami-Dade county, while Broward county saw the figure drop to 13,476 from 21,143. Once the foreclosure process is addressed, the market will be flooded with a new round of real estate-owned homes, potentially sinking prices to previous lows. [Miami Herald]