Analysts: Lenders Control Release of Bank Foreclosures

by Donald Hanz on States

Real estate analysts seem to think that home and condominium prices in South Florida are bottoming out. But they noticed the dwindling number of bank foreclosures on the market, prompting them to conclude that some lenders may be controlling the flow of foreclosures being released on the market.

Analysts said that by controlling the flow of foreclosure properties, lenders are creating an artificial supply shortage, thus encouraging multiple offers and subsequently, increasing prices.

Industry data showed that home sales in South Florida continued to increase last month as short sales and bank foreclosures attracted bargain-hunting homebuyers from across the United States. Sales of single family homes in Miami-Dade area rose by 54 percent while Broward posted a 35 percent increase in June, compared with the same month last year.

Meanwhile, the median price for single family homes declined once more on a year-to-year basis, with Miami-Dade posting a drop of 28 percent and 33 percent in Broward. However, the June median prices were higher than April prices.

Analysts said that the leveling out of median prices was due to the decline in the number of bank foreclosures entering the market for sale and the large volume of high-priced properties that changed hands.

Sales of condominiums increased in both counties of Miami-Dade and Broward by 19 percent and 58 percent, respectively. However, median prices of condominiums declined from $275,600 to $141,000 or 49 percent in the county of Miami-Dade and from $156,200 to $83,900 or 46 percent in the county of Broward, compared with year ago figures.

But for the first half of this year, analysts noted interesting trends in residential real estate market. Miami-Dade’s median prices for single-family homes showed an increasing trend from April to June, with $177,000, $194,700 and $211,400. The same trend happened in Broward starting in April with $191,300, followed by $190,000 and $204,800 in May and June.

Furthermore, the condominium median prices in Miami-Dade range between $140,000 and $149,000 and $80,000 and $85,000 in Broward.

But listings of short sales and bank owned properties dropped by 39 percent last month from 44 percent the previous month. Additionally, sales of distressed properties declined to 54 percent last month from May’s 60 percent.

Currently, bidding wars are being fought in the high-end bank foreclosures market as supply is having difficulty keeping up with an increase in demand.