Intracoastal front Homes purchased in 2010
through July 31, 2010
21 direct Intracoastal front Homes in Broward County have been purchased and their purchase price range was $685,000 – $10,800,000. Their purchase price details are as follows:
2 were purchased for under $700,000
4 were purchased in a price range of $700,000 – $760,000
3 were purchased in a price range of $845,000 – $950,000
7 were purchased in a price range of $1,030,000 – $1,950,000
3 were purchased in a price range of $3,627,500 – $4,100,000
1 was purchased for $6,750,000
1 was purchased for $10,800,000
Communities where the Homes were sold
Bay Colony, Bel Air Isle, Las Olas Isles, Coral Ridge Galt, Coral Ridge North, Harbor Island, Harbor Village, Hillsboro Shores, Idlewyld, Pompano Beach Park, Santamaria Harbor, Sea Ranch Lakes, Silver Shores, and The Cove. These Communities are located in the Broward County Cities of Ft. Lauderdale, Deerfield Beach, Hollywood, Lauderdale by the Sea, Sea Ranch Lakes, and Pompano Beach.
Intracoastal front Homes for Sale
Intracoastal front Homes are a very small part of the Inventory of Waterfront properties and currently, only 96 direct Intracoastal front Homes are listed for sale in Broward County. Their price range is $650,000 – $23,000,000, with an average list price of $2.4 Million.
“Sales of previously owned homes in the United States plummeted 27.2 percent in July compared to the previous month…the latest sales numbers are 25.5 percent below July 2009, and are at their lowest level since May of 1995.”
And I repeat, Real Estate is local. Real Estate is local. Real Estate is local.
The Report that was released is a National Report that isn’t dissected into local Reports that are specific to States, Counties, Cities, and Neighborhoods. Market conditions vary significantly in various areas. Additionally, a 1-month decrease in sales is far from indicative of the overall market.
Our local area is not currently experiencing a level of sales equal to the number of sales in May of 1995 and is not experiencing a 27.2% decrease in home purchases.
What we are experiencing LOCALLY is an increase in sales in the Luxury Market and the non-Luxury Market.
Below are 2 Tables that include data** about our local Market and the 5-year Real Broward Estate Report that I posted details stats and reasons that show why our local area IS NOT significantly impacted by the end of the First Time Home Buyer’s Tax Credit. Most Media Reports are painted with a very broad Brush and you must determine if what you hear/heard applies to you and your area or not.
Single Family Homes Sold
Condos Sold*
June 2009
1,287
1,324
June 2010
1,381
1,627
July 2009
1,375
1,285
July 2010
1,110
1,300
January – July 2009
7,395
7,599
January – July 2010
8,020
10,645
Year
Single Family Homes Sold
Condos* Sold
2006
12,589
13,843
2007
8,926
9,268
2008
9,088
8,811
2009
13,644
14,617
1/1/2010 – 6/30/2010
6,899
9,327
NOTES:
*-When I refer to “Condos”, that includes Condos, Townhouses, Co-ops, and Villas.
This Market report is not indicative of the entire Real Estate Market since I only report on Single Family Homes and Condos. Other property types that are sold include Commercial Property, Land, Docks, and Multi-Family Property such as Duplexes.
**- The Data reported above is limited to sales conducted through Real Estate Brokers, which comprise the majority of Real Estate Sales, however, there are also sales of Developer owned Properties that are not listed in the MLS (one example of a Developer owned property in Broward County that has had significant sales in 2010 is Sapphire Condo which has sold over 40 Units in 2010).
Las Olas area Condos remain in high demand and I frequently work with them. I gathered data about the Sales for the first 6 months of 2010 (January 1, 2010 – June 30, 2010) in Las Olas River House, Symphony, Nu River Landing, Waverly, Watergarden, Las Olas Grand, and 350 Las Olas Place and included it in the Table below.
The numbers clearly show that Market conditions vary significantly in various Buildings and I included some important notes below.
On average, around 10% of the Units in these Buildings are listed for sale and 10% IS NOT considered to be excessive. When reviewing information about the number of active listings in a Building, you must consider the total number of Units in the Building as well. I often hear things like: “Why are there so many listings in the Building?” or “I heard we shouldn’t buy in Building X because everything is for Sale” when, in reality, the number of active listings is small in comparison to the total number of listings in the Building
Of 110 Units purchased in the 7 Buildings, 83 are indicated to have been Cash purchases, as is typical in the current market.
There’s a widespread misconception that if a Unit isn’t a Short Sale, then the Owner is trying to sell it for what they paid for it and that it’s not a good deal. When a property is listed as a Short Sale, it means that the Owner wants the Lender who Financed their purchase of the property to take a loss on the Loan and let a new Buyer purchase the property for today’s market value or slightly less, instead of the higher price that was paid several years ago. Properties that are listed as Short Sales require Bank approval of the purchase terms and price. View additional information about Short Sales here.
Just because a property wasn’t sold as a Short Sale doesn’t mean that the Owner didn’t take a loss and sell it for less than what they paid for it. The vast majority of properties that were purchased during peak market prices are sold for less than their previous purchase prices and are sold for today’s market values or slightly below. The difference is that there are Sellers who are financially capable of personally taking the loss instead of asking their Lender to do so (that means they are personally paying the Lender for the shortage at the time of Closing because they don’t want to ruin their Credit by doing a Short Sale) OR they paid Cash for the property and there isn’t a Loan at all OR there’s a Loan on the property, but the down payment was large. This is typical in higher purchase price ranges and Buildings and Communities where many high net worth individuals reside.
With all properties, when comparing previous purchase prices to current purchase prices, you need to consider the Property’s condition at the time of previous purchase to its’ current condition. I’m referring to cases where properties have been significantly changed and/or improved since the time of purchase. An example of this is Sellers in today’s market who purchased Decorator ready Units during the peak of the market (Decorator Ready Units are unfinished Units that require installation of Flooring, Light Fixtures, Molding, etc.) Such was the case in Las Olas River House and a number of other Buildings. So, let’s say that Mr. and Mrs. Smith purchased Unit 1234 in Las Olas River House for $500,000 and then spent $300,000 for various finishing and customization of the Unit. Their cost for the Unit is now at $800,000 instead of the $500,000 purchase price, so if they’re selling today for $600,000, they’re losing $200,000. I’ve had Buyers say to me: “I looked at Property Tax Records and Mr. and Mrs. Smith paid $500,000 in 2005, now they’re trying to rip us off by selling for $100,000 more than they paid” (they felt that way because they were mis-informed and didn’t understand that they weren’t comparing “Apples to Apples”.) This issue also potentially decreases the number of Short Sales in the Building because if Mr. and Mrs. Smith obtained a Mortgage for $400,000 to purchase their $500,000 Condo, they can sell at today’s market prices without the necessity of doing a Short Sale through their Lender even though they’re selling at a Loss (since the money paid to finish the Unit was from their personal Funds and not related to the Mortgage). All sides of an issue must be considered in order to gain accurate understanding.
Additional issues that impact the number of Short Sales and Foreclosures in a Building include, but aren’t limited to:
>The number of Investors who purchased
>The financial health of the Owners
>The number of Financed purchases and Adjustable Rate Mortgages
>Purchase dates and purchase prices for the majority of the Owners
“Don’t all Florida Homes have Pools?”, I’ve been asked by a number of interested Buyers. Well, the answer is that Homes WITHOUT Pools actually outnumber those that have Pools. Check out the following examples from the current Inventory of Single Family Homes for Sale in Broward County.
Currently, 8,400 Single Family Homes are listed for Sale
Of the 8,400 Homes, only 3,332 are listed as having a Pool
Of the 3,332 Homes that have a Pool, 1,532 are priced at $500,000 and above
Of 8,400 Homes listed for Sale, only 1,391 are located in Ft. Lauderdale and, of the 1,391 Homes, only 634 have Pools
Of the 634 Homes, only 81 are priced under $300,000 and have a minimum of 3 Bedrooms and 2 Baths. Of the 81 Homes, only 13 have a 2-Car Garage
So, less than half of the Homes listed for sale have Pools. As you drill down further into the Inventory and add additional search criteria such as price, City, Garage, number of Bedrooms and Baths, Waterfront or non-Waterfront, condition, size, Architectural style, Neighborhood, Floor Plan, and other features, the selection decreases significantly more.
Interested Buyers who are searching for Homes are very often surprised to find that once they specify all of their search criteria, there’s a VERY small selection of appropriate Homes that are available. Their initial response is typically disbelief, which leads them to search multiple websites repeatedly and contact a number of different Real Estate Agents before finally realizing that just because they heard that Inventory is high, it didn’t mean that the majority of that Inventory is appropriate for their specific preferences.
If you’re seriously motivated to purchase and are finding that very few Homes meet your preferences, having flexibility with search criteria is helpful. Maybe you found a Home that’s “The One” except it doesn’t have a Pool. If there’s sufficient space in the Yard to build a Pool and if the property would otherwise accommodate a Pool, you can consider the possibility of adding a Pool later and can obtain Quotes for Pool construction to see if the cost would work for your budget.
Of the Homes in South Florida that have Pools, there are some great ones to choose from and I selected pictures below of a few Pools that are BEAUTIFUL! Enjoy
Today, 8/19/10, I sold 9637 Exbury Ct. to Buyers who purchased the Home as their Primary Residence. This Home is located in Parkland, FL in the Bella Flor section of the beautiful Guard Gated Golf Course Community, Parkland Golf and Country Club.
Details:
Built in 2007
Marabella Floor Plan with 2,666 Square Feet of Living Area
4 Bedrooms, 3 Full Baths, and 2-Car Garage
Marble Floors throughout except for Carpet in the Bedrooms
Spacious Master Bath with Roman Tub, 2 Vanities, and separate Shower
Beautiful Tropical Landscaping, spacious Backyard + a Water Fountain installed by Parkland Golf and Country Club in the shared area behind the House
Purchased as a Bank Owned Foreclosure for $362,900
Condition: Turnkey/Move-in condition. Although it was a Bank Owned Foreclosure, the previous Owners left the Home in great condition and all of the pictures in this post are pictures that I shot while visiting the property
Sales are continuing to increase in the Luxury segment of the Condo market. In my 6/26/10 post, I reported that 181 sales of Condos and Townhouses in Broward County have been recorded in the MLS* and Tax Records in 2010 from January 1, 2010 – May 31, 2010 in a purchase price range of $500,000 – $4,000,000.
Since then, during the months of June and July of 2010, sales of 60 Condos and Townhouses in the $500,000+ purchase price range have been recorded. Their purchase price range was $500,000 – $2,931,035.
49 of the 60 sales are indicated to have been Cash purchases, as is typical in the current market
13 of the purchases were $1,000,000 and over
54 of the 60 properties are Waterfront Properties
4 of the sales were Bank Owned Foreclosures and 9 were Short Sales (Short Sales and Foreclosures ARE NOT the majority of Luxury Property sales)
Of the Cities where the Condos are located, Ft. Lauderdale had the highest number of Sales, accounting for 35 of the 60 sales
Regarding Waterfront Condos, the Term “Luxury” is relative because prices vary significantly based on views from the Unit, low Floor vs. high Floor, quality of the Building, type of Waterfront location, and other factors, so it’s possible, in some cases, to pay a luxury price for a Unit that’s in need of complete updating and/or remodeling because the price reflected fabulous views, larger size, and/or other features that demand premium price
2009 vs. 2010 Sales
Sales have increased since 2009. Within the first 7 Months of 2009 (January 1st – July 31st), there were 187 Sales of Condos within the $500,000+ purchase price range compared to 260 sales within that price range during January – July of 2010.
Condos and Townhouses purchased for $1,000,000+:
Acqua Marina Residences Townhouses, Alhambra Place Condo, Harbourage Place Condo, L’Ambiance Condo, Las Olas River House Condo, L’Hermitage Condo, Ocean Palms Condo, The Palms Condo, and Trump Hollywood Condo.
Details about the $2,931,035.00 Condo that was purchased
Located in Harbourage Place Condo, a Ft. Lauderdale Intracoastal Condo that was built in 2000
Purchased on July 26, 2010 for $2,931,035
3 Bedrooms, 4.5 Baths
6,000 Square Feet of Living Area and 2,100 Square Feet of Terraces
2-Story Penthouse on the 22nd Floor with Ocean, River, Intracoastal, and City views
55′ Boat Slip accompanied the purchase
Monthly Maintenance Fee of $4,251
Ft. Lauderdale Properties Sold
45 Hendricks, Acqua Marina Residences, Alhambra Place, Castelane Lofts, Coconut Grove Residences, Coral Ridge Townhouse, Harbourage Place, Jackson Tower, L’Hermitage, Las Olas Grand, Las Olas River House, Oceanage, Palm Grove Townhouse, Place des Artes, Plaza East, L’Ambiance, Point of Americas, Hilton Resort, Sky Harbour East, Terraces of the Isles, The Palms.
Hillsboro Beach Properties Sold
Hillsboro Square and Ocean Grande
Deerfield Beach Properties Sold
1 Ocean Blvd.
Pompano Beach Properties Sold
Hillsboro Bay by the Sea
Lauderdale by the Sea Properties Sold
Aquazul, Cristelle, Europa by the Sea, Sea Ranch Club, and Villas by the Sea
Hollywood Properties Sold
Trump Hollywood, Diplomat Oceanfront Residences, Ocean Palms, and Renaissance on the Ocean
Hallandale Properties Sold
Beach Club 1, 2, and 3
*- MLS = Multiple Listing Service (the central Database where Brokers input and store listing and purchase data for properties that they represent for property Owners)
Located in Ft. Lauderdale, FL, Venetian Condo is an Intracoastal front Building of 237 Units located at the Intersection of Las Olas Blvd. and A1A, on the Ocean side of the Intracoastal Bridge.
Last Friday, August 13, 2010, I sold Unit #1006 for a purchase price of $432,000 to Buyers from Dallas, TX who purchased the Residence as a vacation Home for themselves and their Children.
Unit #1006 has 2 Bedrooms, 2 Baths, an open Floorplan, ~1,500 square feet, and beautiful Ocean and Intracoastal views from the Balcony.
Venetian Condo’s location offers a perfect combination of walking distance to the Beach, downtown/Las Olas area, Shops, Restaurants, and the International Swimming Hall of Fame + is next door to Coconut’s Restaurant on the Intracoastal. If Diving is one of your interests (as it is for my Buyers who purchased the Condo), Pro Dive International is located within walking distance as well. Venetian Condo is also a great location for Boat Owners since Boat Slips (when available) can be Leased for an Annual rate of $3,000, which is significantly less than Marina rates for Dockage.
So far in 2010, there were 12 Condos sold in Venetian Las Olas. Their purchase price range was $265,000 for a 1st Floor Unit – $1,700,000 for a Penthouse with 4,500 square feet of Living Area. Venetian is a very stable Building and, of the 12 Units sold, 1 was a Bank owned Foreclosure and none were Short Sales. Of the 237 total Units in the Building, 8 are currently listed for sale and their price range is $279,000 – $1,099,000 (1 of the Listings is a Short Sale and none are Bank owned Foreclosures). 3 Units are currently listed as being under pending Contract for purchase.
The Sales data recorded in the MLS* for Broward County for the last 4.5 years is in the Table below. Properties sold through Real Estate Brokers comprise the vast majority of Properties sold, however, there are also private Sales and Sales conducted through Developers that were not listed on the MLS. Please note as well that this information is not indicative of the entire Real Estate Market since I only report on Single Family Homes and Condos**. Other property types that are sold include Commercial Property, Land, Docks, and Multi-Family Property such as Duplexes.
Year
Single Family Homes Sold
Condos Sold
2006
12,589
13,843
2007
8,926
9,268
2008
9,088
8,811
2009
13,644
14,617
1/1/2010 – 6/30/2010
6,899
9,327
It’s always very interesting to see the numbers because they usually tell a far different story than what’s rumored to be true. I’ve had people tell me how they remember what a hot year 2007 was for local Real Estate because prices were still high, when in reality, Inventory was at very high levels, average days on market were very lengthy, and sales had decreased significantly.
Recent activity is that prices have decreased significantly since several years ago, Inventory has decreased, days on market have decreased, and sales have increased. At the peak of Inventory, which was May of 2008, there were 14,454 Single Family Homes for Sale. Now, there are 8,403 Single Family Homes for sale in Broward County. At the lowest point of Inventory, which was June of 2005, there were 3,058 Single Family Homes for sale and you constantly heard “we went to place an Offer on the House and it was already sold.”
At the current rate of Home purchases for 2010, it appears that more Homes will be sold this year than last year.
Since sales have increased, I’ve noticed a significantly marked decrease in the numbers of Sellers who are offering Closing Cost assistance and similiar Offers (something I saw A LOT of in 2007 and 2008). During that time, many Houses were sitting on the market forever. Someone asked me the other day if it’s a Buyer’s or Seller’s Market (actually their question was more of a statement wanting confirmation that it’s still a Buyer’s Market). My response was that “it depends on which segment of the market you’re referring to.” With the decreased inventory and increased number of sales, the $350,000 and under price range feels very much like a Seller’s Market instead of the Buyer’s Market that it was for a couple of years and, with Waterfront Properties, the same is the case with the $600,000 and under price range. Many Properties within this price range that are in great condition, good location, have other very desireable features, are priced at or slightly below current market value as soon as they’re listed, and are Regular Sales or Bank Owned Foreclosures, have been going under Contract and Closing within 30 – 60 days or less from the time they were listed, and have multiple Offers quickly. I didn’t include Short Sales in this Category because many Buyers will first attempt to purchase a regular sale or Bank owned Foreclosure since they aren’t interested in the lengthy review and approval process required for Short Sales.
Media Reports and “word on the streets” are that significantly increased sales can primarily be attributed to the First Time Homebuyer’s Tax Credit and that sales have significantly decreased after the end of the Tax Credit. In a recent news report on CNBC, Diana Olick stated “…Homes just aren’t selling after that Tax Credit.” While that’s certainly true in some Markets, IT DOES NOT APPLY TO ALL MARKETS and while we’ve had some sale increases because of the First Time Home Buyer Tax Credit, many areas in South Florida are not areas that are primarily driven by First Time Home Buyers. We are very fortunate to be an area that has a wide variety of Buyers who purchase property.
Homes here are still selling. No, it’s not a lie that us Real Estate Agents are telling you. You must at all times consider that Real Estate is not only local, but hyperlocal. Real Estate Market conditions are VERY SPECIFIC to various States, Counties, Cities, and Neighborhoods (and, in the case of Condos, very specific to each Building). There are Neighborhoods and Buildings that are very healthy and others that are very unhealthy, some that are even in very close proximity to each other. Most Media Reports are painted with a very broad Brush and you must determine if what you hear/heard applies to you and your area or not.
The following facts are reasons that point to First Time Home Buyers NOT being the majority of purchasers in our local Market:
Approximately 50% of sales in the current Market are Cash sales. Although some First Time Home Buyers are Cash Buyers, most are not. Most Cash purchases are made by Investors and others who don’t require Financing.
Of 9,327 Condos, Townhouses, and Villas purchased in Broward County in 2010, 7,168 are indicated to have been Cash purchases.
Of 6,899 Single Family Homes purchased in Broward County in 2010, 2,542 are indicated to have been Cash purchases.
As prices have declined, large numbers of Investors have re-entered the Market and are purchasing properties to Lease to Tenants or renovating properties and selling them at current market value.
The basic Single Family Home/”Starter Home” that’s often of interest to many First Time Home Buyers (the 3 Bedroom, 2 Bath Home with a Garage and Pool) still costs, on average, much more than the “under $200,000″ highly requested price range for such a Home. We aren’t an area where the average Single Family Home costs $100,000. Sure, there are Houses available within that price range, but most don’t have the condition, size, location, or other features that are considered most desireable. Of 3,625 Single Family Homes purchased for a maximum of $200,000, 1,766 of those are indicated to have been Cash purchases. Of 1,693 Single Family Homes purchased under $100,000, 1,303 are indicated to have been Cash purchases. Regarding price range, yes, there are First Time Home Buyers who purchase Houses that are $400,000+, but many Buyers in that price range aren’t First Time Home Buyer or wouldn’t financially qualify for the First Time Home Buyers Tax Credit anyway (Income Limits applied to eligibility for the Tax Credit) or just weren’t motivated to buy because of the Tax Credit.
Florida, particularly South Florida, remains number 1 in the United States for the number of purchases of vacation property to International and Domestic Buyers. As such, they account for a high number of Sales locally and the huge reduction in prices has increased their level of interest and purchases even more. Keep in mind that this group of Buyers DOES NOT qualify for the First Time Home Buyer Tax Credit since it applies to primary Residences only.
To qualify for the First Time Homebuyer Tax Credit, you had to be under Contract/have a signed Contract to purchase Property by April 30, 2010 (the most recent extension of the Tax Credit was for the Closing date, not the “under contract” date). We’re more than 3 months past April 30th and pending sales haven’t seen a serious decline. Currently, there are 5,157 pending sales of Single Family Homes and 6,277 pending sales of Condos, Townhouses, Villas, and Co-ops. Yes, Contracts can and do fall through, but a Property’s status in the MLS being changed to “Pending” is the only way to get an approximate idea of how many Properties are currently under Contract to be purchased.
Is more improvement needed in the market? Of course, particularly in the area of distressed properties, however, increased sales are definitely positive, as well as the large numbers of Buyers who are purchasing properties with Cash.
*-The MLS is the database where information is stored about active, pending, sold, and expired Listings
**-When I refer to “Condos”, that includes Condos, Townhouses, Co-ops, and Villas
Foreclosures Sold in Broward County in the 1st 6 months of 2010
Within the first 6 months of 2010, purchases of 2,100 Bank Owned Single Family Homes have been recorded in the MLS*. Within the same period of time, there were 3,387 purchases of non Distressed Properties and 1,402 purchases of properties listed as Short Sales. So, purchases of distressed properties continue to account for ~50% of purchases in our current local market (and if you’re thinking about how 50% distressed properties is a lot, then you also need to take into consideration that there’s also 50% of properties that ARE NOT distressed–ALL sides of an issue must be considered).
Let’s drill down and take a closer look at the Stats for Bank Owned Foreclosure Purchases
Purchase price range and other details for Single Family Homes Sold
1,288 of the 2,100 purchases are indicated to have been Cash purchases
1,013 of the Homes were purchased for prices under $100,000 and 888 of the 1,013 purchases are indicated to have been Cash purchases. This segment of the market continues to be very Investor driven and IS NOT full of First Time Home Buyers as many often think. The average number of days on the Market was 40. The average List Price to Purchase Price Ratio was 102.73%.
561 were purchased in a range of $100,000 – $199,999 and 228 of the purchases are indicated to have been Cash purchases. The average number of days on the Market was 39.24 and the average List Price to Purchase Price Ratio was 99.79%.
345 were purchased in a range of $200,000 – $299,999 and 103 of the purchases are indicated to have been Cash purchases. The average number of days on the Market was 46.83 and average List Price to Purchase Price Ratio was 99.21%.
115 were purchased in a range of $300,000 – $399,999 and 41 of the purchases are indicated to have been Cash purchases. The average number of days on the Market was 40.83 and average List Price to Purchase Price Ratio was 99.49%.
36 were purchased in a range of $400,000 – $499,999 and 16 of the purchases are indicated to have been Cash purchases. The average number of days on the Market was 37.69 and average List Price to Purchase Price Ratio was 98.3%.
13 were purchased in a range of $500,000 – $599,999 and 6 of the purchases are indicated to have been Cash purchases. The average number of days on the Market was 28 and average List Price to Purchase Price Ratio was 102.54%.
17 were purchased in a range of $600,000 – $1,500,000 and 6 of the purchases are indicated to have been Cash purchases. The average number of days on the Market was 49.41 and average List Price to Purchase Price Ratio was 96.29%.
Of the 2,100 Foreclosures purchased, 31 are Waterfront Homes
Location, location, location!
Where are the Foreclosures located?
I’m contacted by many Buyers who live Abroad and in the U.S. who are interested in Waterfront Foreclosures and Luxury Foreclosures. After all, they’ve heard that “everything is in Foreclosure, Million Dollar Houses are being given away, all Owners are desperate, the Houses are dark at night save the glow of a few Candles because the Lights have been cut off, Garage Sales line the Streets of Las Olas Isles, and new Maseratis are being sold for $30,000.” Okay, I added the last 3 for effect (LOL), but you get the point.
When touring Luxury Neighborhoods with Buyers when viewing Homes, many have been quite surprised to see that most of the Homes are occupied, not in Foreclosure or Pre-Foreclosure, that there are plenty of Vendors visiting the Homes providing services (Lawn and Pool Maintenance, Maid Service, Pet Sitters, Caterers, and others), and that on a number of Streets, there are Luxury Homes that are actively under Construction (not stalled Construction).
I feel like I say this 10 times a day, but you must understand that Market conditions, prices, and inventory vary significantly in various Neighborhoods and Cities. Here in Broward County, the majority of Land is West of I-95 and West of U.S. 1 (to those not familiar with the area, West of I-95 and West of U.S. 1 are more distant from the Beach and the majority of Ocean Access Waterfront Properties are located East of I-95).
Areas that are located West have the largest amount of Foreclosure Inventory.
Because of higher concentration of Land and purchases West, there’s far less Inventory of Properties available that are East and Waterfront and far less Foreclosure Inventory in East and Waterfront Neighborhoods (when I refer to Waterfront, I mean Ocean Access Waterfront, not Property located on Lakes and other Bodies of Water that don’t connect to the Ocean).
So you say, “I don’t mind waiting until there are more East and Waterfront Foreclosures listed for Sale”. While we know that there will definitely be more Foreclosures listed for sale since the Banks haven’t released all of them and since there are more Owners going into Foreclosure, just keep in mind that East and Waterfront Foreclosures will remain the smallest part of Foreclosure inventory.
Luxury vs. non-Luxury Foreclosures
You’ve read that there are lots of $100,000 Foreclosures that are being purchased and now you’re excited about the possibility of getting a fabulous Home for a very low price. Well, think again. “You get what you pay for” is very true in this situation. Sure you can buy a House for $100,000, but first understand that, in almost all cases, these Homes are in need of significant repair and/or cosmetic updates, aren’t located in beautiful Neighborhoods, or are undesireable to the “Fabulous Only Buyer” in some other aspect. Though prices have declined significantly in the last 5 years, $100,000 isn’t the average price range for a move-in ready Home with all the “Bells and Whistles” in our local area (there are areas where that’s the case, but not here in Broward County).
The majority of active Foreclosure Inventory is in the under $200,000 price range, so most aren’t Luxury Properties and most aren’t in Luxury Neighborhoods. Far more Homeowners in the lower price range have gone into Foreclosure than in the higher price range, however, sources currently indicate that there has been an increase in Foreclosures in the upper price range, so it appears that we’ll eventually have a few more of those to choose from. Sure, lots of people are financially hurting, but on different levels, and there are those who have suffered financial losses, but not to the extent that they can’t continue to lead luxury Lifestyles or at least very comfortable Lifestyles (look at all the Cash Buyers of Real Estate in the current market, for example–I really don’t think the $500,000 Cash they spent to purchase property came anywhere close to depleting their Financial resources).
A great example of a Luxury Foreclosure is the one pictured below, which is located in Southwest Ranches, was purchased as a Foreclosure for $1,060,000, built in 2005, and located on 2 Acres of Land (the East vs. West thing again…you can find Houses with large Acreage in areas West in the County whereas many East Properties have an average Lot size of 1/4 Acre or less and you get more House for your money in West locations since Land value is such a large part of the price with East properties). It has 5 Bedrooms, 4.5 Baths, 2-Car Garage, 6,228 Total Square Feet, an Infinity Pool with Waterfall, Marble Floors, and more. The purchase price by the original Buyer in 2004 was $1,575,000.
Are there great deals available? Yes, great great deals are available and prices today are significantly less than they were 5 years ago. Just because a property isn’t a Foreclosure doesn’t mean that it isn’t a great deal. There are many motivated Homeowners who have priced their properties at or below current market values.
Condos, Townhouses, and Villas that were sold
Within the first 6 months of 2010, purchases of 3,219 Bank owned Condos, Townhouses, and Villas were recorded in the MLS. Within the same period of time, there were 4,239 purchases of non Distressed Properties and 1,774 purchases of properties listed as Short Sales. So, sales of distressed properties were slightly more than half of all properties purchased.
Purchase price range and other details for Condos, Villas, and Townhouses Sold
2,708 of the 3,219 purchases are indicated to have been Cash purchases! Besides issues of condition and the simple preference to pay Cash rather than Finance, many Condo purchases are Cash purchases because of prohibitive Lending criteria for Condos
2,488 were purchased under $100,000
600 were purchased from $100,000 – $199,999
90 were purchased from $200,000 – $299,999
18 were purchased from $300,000 – $399,999
6 were purchased from $400,000 – $499,999
17 were purchased from $500,000 – $990,000
Of the 3,219 purchases, 258 are Waterfront properties
Key Points for the overall Foreclosure Purchase Report include the following:
More than half of the purchases were Cash purchases, so Cash Buyers have lots of competition from other Cash Buyers when placing Offers. Cash purchases continue to account for ~50% of ALL SALES (both distressed and non-distressed) in the current market
Luxury and Waterfront (Ocean Access) Foreclosures are not the majority of Foreclosure purchases
Most Foreclosure inventory is located West
Most Bank owned Foreclosure Properties are purchased very quickly
Most are purchased at or above List Price
Purchases of distressed properties continue to account for ~50% of purchases in our current local Market
Many Investors are purchasing Homes in the lower price range
Real Estate is very local. Every market is very different and there are even significant differences from one Neighborhood to the next and from one Building to the next
Current Foreclosure Inventory
Currently, there are 735 active listings of Bank owned Single Family Homes for Sale and 1,079 Condos, Townhouses and Villas for Sale. But, you say, “I know there are more Foreclosures available than that.” Of course there are! Several issues cause low inventory of Foreclosures listed for sale. These issues include, but aren’t limited to:
Banks don’t release all of their available Inventory at one time
A lengthy process is required to be completed before Homes are made available for purchase and the large number of Foreclosures contributes to the length of time for processing
Some Forecloures are never listed for sale on the MLS* and are, instead, purchased in bulk from Banks by Investment groups or Corporations, sold “on the Courthouse steps”, or sold through Auction
Because most Bank Owned Foreclosures are purchased quickly, the available inventory of properties actively listed for sale diminishes quickly
There’s significant confusion that exists among interested Buyers who view non-MLS listings of Foreclosures on websites that list properties that are stated to be in Foreclosure. Many such properties are not Bank owned yet (the Owners are simply delinquent on Mortgage payments and have been marked in Property Tax Records as being in pre-Foreclosure) or the properties are indeed Bank owned, but not accessible for purchase yet. Additionally, some sites categorize Short Sales as Foreclosures, which is totally incorrect. When I refer to Foreclosures, I strictly mean Bank owned Foreclosures.
*MLS= Multiple Listing Service (the database where Real Estate Brokers input Listings of properties for sale and sold). Properties sold through the MLS comprise the vast majority of properties that are purchased. Property purchase information can also be verified through searching Property Tax Records.
The purchase price range of the Units purchased was $365,000 – $1,600,000 and the purchase dates are indicated as January 8, 2010 – June 29, 2010.
6 Units were purchased for under $400,000
10 Units were purchased from $401,000 – $475,000
5 Units were purchased from $570,000 – $585,000
3 Units were purchased from $608,000 – $655,000
1 Unit was purchased for $740,000
3 Units were purchased from $863,000 – $850,000
1 Unit was purchased for $1,600,000
The current price reductions for the Developer owned Units represent more than a 65% discount off of the highest purchase price previously. The current price range of Units listed for sale is $400,000′s – $1,200,000.
It’s a beautiful Building of Contemporary Design and has fabulous Amenities (40,000 sq ft of Amenities include: Tennis Courts, State of the Art Fitness Center, Spa with Saunas and Massage Treatment Room, Golf Simulator, Billiard and Games Room, Movie Screening Theater, Wine Tasting Room, Cigar Humidor, Media Center, News Cafe, Teen Lounge, Children’s Playroom). View additional details about Oceanside Pompano Beach Condo and contact me if you would like to schedule an appointment to view Units or would like additional information.
