Nearly 42 percent of the nearly 53,000 condominiums for resale in the tricounty South Florida region are in some form of distress with the ratio of troubled product reaching as high as 50 percent in Miami-Dade County, says a new report from Condo Vultures.
More than 22,200 condominium units on the resale market in Miami-Dade, Broward, and Palm Beach counties are either bank-owned properties or in the process of a short sale where the lenders accepts less than what is owed on the existing mortgage, according to the report based on Florida Association of Realtors data.
"Distressed condos are going under contract in South Florida at a pace that is three times faster than those units that are not bank-owned or in the process of a short sale," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based Condo Vultures LLC. "Today's condo buyers are purchasing with all cash, so the natural focus is to gravitate toward the distressed units that can be acquired at a deep discount. The product that is not officially deemed to be distressed is selling but at a much slower pace."
In South Florida, there are currently 3,600 bank-owned properties on the resale market plus an additional 18,600 short sales available. An additional 30,500 condo units are for sale that are not officially categorized to be in distress.
Of the 22,200 distressed condos on the resale market, more than 7,900 units, or 36 percent, are currently under contract waiting to close, leaving about 14,300 troubled properties actively available for purchase, according to the report.
Of the 30,500 condos available for resale but not officially bank-owned or a short sale, some 3,700 units, or 12 percent, are under contract, leaving some 26,800 condos available, according to the report.
On a county-by-county basis, Miami-Dade County, where Aventura, Key Biscayne, and Miami Beach are located, accounts for 10,900 distressed condos on the market, with 4,200 under contract. This means that 38 percent of the distressed condos on the market in Miami-Dade County are under contract, according to the report.
Miami-Dade has an additional 10,900 units for sale that are not distressed. Nearly 1,200, or 11 percent, of these units are under contract.
In Broward County, where Fort Lauderdale, Hollywood, and Pompano Beach are located, there are 8,000 distressed condos on the market, with 3,200 under contract. This means that 40 percent of the distressed condos on the market in Broward County are under contract.
Broward County has an additional 8,100 units that are not distressed. Nearly 1,400, or 14 percent, of these units are under contract.
In Palm Beach County, where Boca Raton, Delray Beach, and West Palm Beach are located, there are 3,300 distressed condos on the market with 550 under contract. This means that 17 percent of the distressed condos in Palm Beach County are under contract.
Palm Beach County has nearly 9,000 more condos that are not distressed. Nearly 1,200 units, or 12 percent, are under contract, according to the report.