Real Estate Feast

An intimate view of South Florida foreclosures

Foreclosures in South Florida

As a real estate agent plying his trade in the trenches (Miami is the Baghdad of foreclosures), I think this mess is a combination of greed and outright fraud.  Much of what I do now is foreclosure sales in Homestead, about twenty miles south of Miami.  Six or seven years ago, what is now literally thousand upon thousands of ticky-tacky, side-by-side townhomes and crammed together “zero lot line” homes, was tomato, potato, bean and strawberry fields.  Homestead was the winter vegetable capital of the world.  The economy was roaring, agricultural land was cheap and people wanted “affordable” housing.  The politicians, in the thrall of the developers, said sure, go ahead and flatten those fields.  So they did and where vegetables once grew housing sprouted.  Cheaply built cookie-cutter housing.  With no additional infrastructure to handle the traffic or enough schools.  People were pushed into adjustable mortgages with low initial payments and told not to worry about the re-set because they could always refinance because the houses would be worth more every year.  People, “flippers”, hoping to profit from the boom bought five or six houses at a time.  The market peaked in December of 2005; the mean sales price for single family homes has declined 30% since then and has more to go.  We now have 85,000 single family homes and condos for sale in Miami-Dade and Broward Counties.  At the rate they’re selling, that’s a five-year supply.  I sold a three-bedroom three-bath condo for $171,000 that two years ago someone bought for $300,000.  He was a real estate agent who owned several of the units.  Now he owns nothing and the bank lost money on all his properties.  I just sold another 3/3 for $125,000 that two years ago a family paid $240,000 for and then he lost his job and the adjustable went up and then they just walked away from the house.  Leaving the kids toys behind along with a whole bar full of liquor.  One of my listings is for a townhome that was purchased by a young musician and his wife and lived in with their two kids.  Three years ago he paid $260,000 and had two mortgages for 100% financing.  This was a guy without a job playing Mariachi gigs and two different banks gave him $260,000.  We have a “keys for cash” program where we offer the previous owners still living in property they don’t own a payment to vacate because that’s cheaper than evicting them.  I met him in a Wendy’s, had him sign an agreement and then met him at his ex-house to get the keys, inspect the property and make sure he didn’t trash anything.  (Lot’s of people trash the place, they rip out wires, leave the water running, break windows, kick in cabinets.  He and his family didn’t–they even vacuumed the carpets.  He was happy to get his $1,000 and would use it along with the mortgage payments he had saved by not paying them for the last year to start a new life in a rental.  Seven years from now he’ll be able to buy something else.  The people I feel sorriest for are the neighbors of these foreclosures.  They paid the same as the people who’ve gone and now their property is worth exactly what I sell the foreclosures for.  About half.  But they’re still there, making their payments and supporting the whole townhouse complex maintenance with about half the residents.  It’s all a heartbreaking mess.  The ray of hope is that the crisis has reduced housing prices significantly, so that now more and more people can afford homes.

This entry was posted on Sunday, November 2nd, 2008 at 2:52 am and is filed under Real Estate News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

1. SELECT SOUTH FLORIDA CITIES HOUSE SALES STATISTICS | Bob Bishopric said at November 19th, 2008 at 1:56 am

   [...] The following sets will give you a snapshot of six different South Florida areas.  As you can see, Homestead, the capital of foreclosures is very active and price depressed.  The percent of list price is the difference between what was asked and what houses sold for.   You can read my article about foreclosures here. [...]

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