Posted on Tue, Jun. 02, 2009
The foreclosure tsunami that has washed over Miami-Dade County's town home and condo market is helping to wipe the slate clean for some projects with the worst foreclosure problems. In a dubious reversal of fortune, seven of the top 10 most foreclosure-ridden complexes last year ranked among the 10 top-selling projects in the first three months of 2009, largely because banks slashed prices to the bone in order to speed sales.
The new figures come from Miami-based market research firm CondoReports.com, which compared foreclosure and sales transactions in its database of 2,000 Miami-Dade projects built before 2008.
The top three best-selling projects were in Miami-Dade's farthest flung suburbs. Shoma at Keys Cove in Homestead ranked first with 50 sales; followed by Mandarin Lakes near South Miami Heights, with 32 sales; and, Bluewaters subdivision in the Country Walk area, also with 32 sales.
Several Brickell area luxury condos that became notorious for hallways dotted with eviction stickers and lock boxes also made the list, including the Club at Brickell Bay and the Vue at Brickell.
With the financing bar set too high for many buyers, sales in the condo market are still anemic relative to the volume of units on the market. Additionally, many lenders still refuse to write loans for condos and town houses in Florida because of the risk of further price declines and foreclosures. Consequently, many foreclosure sales are all-cash transactions to investors.
Transactions in the top 10 selling projects accounted for more than 11 percent of the 2,600 condo and town home sales tracked by the firm in Miami-Dade County. The projects, however, represent only 0.5 percent of the 2,000 projects followed during the first quarter.
Adam Cappel, CondoReports.com president, said it was notable that such a large percentage of sales activity was concentrated in only a small number of projects.
''The people in control of most of these units are banks and they are obviously the most motivated market participants to move the product -- rather than individuals who might be holding out for higher prices or a price they could get a year or two years ago,'' Cappel said.
In compiling the list, CondoReports. com looked at closed sales in projects with 50 or more units, excluding newly constructed projects from 2008 and 2009. Developers in many of those buildings are still closing preconstruction contracts, which, Cappel said, do not generally reflect the current market prices.
While the average sales prices at Shoma at Keys Cove was a mere $38,060, pricing was not the only factor that propelled the projects to the top of the pack, he said.
'In these buildings, banks are meeting market prices, but there are also a lot of banks controlling a lot of units -- through foreclosures or by having the `yes' or 'no' on short sales,'' Cappel said.
The average sales price of homes in the second-ranked Mandarin Lakes was about $192,000 and about $211,000 in Bluewaters, which ranked third.
Foreclosures and short-sales -- in which a lender allows a homeowner to sell for less than the full mortgage amount owed -- accounted for more than 60 percent of all home sales in April.