Distressed sales fall in South Florida, but short sales begin to pick up steam
South Florida’s recent surge in foreclosure-processing activity hasn’t yet had an impact on the number of distressed sales, according to data released today by RealtyTrac. Foreclosure sales in South Florida actually fell 8 percent to 11,038 in the first three months of this year, down from 11,995 in the same period in 2011, according to RealtyTrac. But activity increased by 25 percent compared to the last quarter of 2011, a sign that distressed sales activity could be picking up steam.
While the number of overall sales dropped, banks are increasingly turning their attention to short sales, leading to a 39-percent increase in the number of pre-foreclosure sales from the fourth quarter of 2011 to the first quarter of 2012 in South Florida, according to RealtyTrac spokesperson Daren Blomquist.
“I think that lenders are viewing short sales more favorably than they have in the past, because it’s becoming increasingly difficult for them to foreclose,” Blomquist told The Real Deal. “The process has become much more scrutinized and lengthy and even costly for the lender to foreclose, so a short sale is the only way for them to dispose of these distressed assets on their books.”
In the first quarter, sales of bank-owned properties in South Florida, or REOs, have dropped 41 percent.
“The pre-foreclosure sales outnumbered the REO sales, which in the past is not something that we’ve seen,” Blomquist said. “Usually the REO sales outnumber the pre-foreclosure sales.”
Banks have also improved their short-sale operations, he said, with increased staffing and attention to the process.
For short sales, Miami-Dade County led the way in the first quarter with 4,585 short sales, a 5 percent drop from the first quarter of 2011. Broward County’s foreclosure sales activity fell by just under 20 percent in the same period, while Palm Beach County saw a 3.2-percent increase.
The average sales price of a pre-foreclosure transaction in Miami was $130,288, easily the highest in the region. Miami’s foreclosures sales transacted for an average of 45 percent off the market value of the property.
Nationally, short sales hit a three-year high in the first-quarter, with a 25 percent increase compared to the first quarter of 2011.