Broward Foreclosure Auctions Update And Trends For 2022

Broward County has seen some major changes within the past year in terms of increase in median home prices, population growth, as well as economic development. The impact of these changes has not been restricted to the traditional real estate sphere but has also extended to the foreclosure auctions scene as well. 

Foreclosure auctions in the initial five months of the year have not followed a steady pattern. Rather, there have been variations with January sporting a significantly high figure before experiencing a major drop in February. March saw a slight increase in auction figures from February and April did more numbers than March as well. 

A conclusion cannot be drawn for the Month of May just yet given that auction figures would likely still increase. It is worthy of note that figures in the initial four months of 2022 saw a year-over-year increase relative to the same months in 2021. January saw the most significant spike with the figures nearly doubling from last year. 

An increase can be noted in other months from February to April. This implies that foreclosure auctions in Broward County have been on the rise. To determine whether this is only a fluke and possibly evaluate whether this pattern would be a sustainable one, we would need to take a look at the general real estate scene in Broward County. 

Latest Home Sale Trend In Broward County 

Statistics from the Multiple Listing Service (MLS) system and MIAMI Association of Realtors (MIAMI) saw Broward County maintain the increasing rate of home sales with a high figure recorded in January 2022 as well.

It is important to note that 2021 saw a new all-time record of annual home sales ever made in Broward county. Home sales went from 2,416 to 2,559 indicating a 5.9% year-over-year increase was recorded in January 2022. Condo sales went from 1,262 to 1,446, a 14.6% increase, while single-family home sales dropped by 3.6%. 

As of April, the real estate market in Broward County recorded 5,900 homes as the total number of homes available for sale. This was a 6.7% decrease from the total number of homes available in March which stood at 6,324 homes. A clear indication of a drop in listings. April 2022 listings had a median price of $354,393 and spent about 31 days on the market. Within the same month, over 596 listings sold below the listed price, 289 listings sold for the listed price, and over 652 listings sold above their listing prices. 

In addition, in the period between March and April, home prices saw some major increments with the volume of homes available seeing some slight, yet impactful decreases. 5 bedroom properties saw their prices go up by 28.6%, 4 bedroom property prices went up by 21.3%, 3 bedroom homes increased by 17.4%, 2 bedroom homes saw a 17.2% increase, while 1 bedroom properties recorded a 20.9% increase in their sales price. 

In terms of listing volume, the inventory for 5-bedroom homes on the market reduced by 1.4%, 4 bedroom homes dropped by 2.3%, 3 bedroom property listings reduced by 7.5%, 2 bedrooms also saw a decrease of 9.6%, and finally, 1 bedroom home listings went down by 7.5%. 

This reduction in listing numbers is no doubt a major reason for the spike in prices recorded in April 2022. However, in spite of this price hike, demand for homes is strong as ever and steadily increasing. One factor driving this is the potential increase in mortgage rates expected to happen sometime in the future. As a result, many home buyers are looking to lock in the present favorable rates given that it would pay off in the long run. 

What are Other Factors Causing this Prevailing Trend?

With the economy in recovery from the onslaught of the COVID 19 pandemic, the South Florida real estate scene has seen a rise in the flurry of activity occurring there. International buyers are flocking back in to purchase choice properties. International investment in Florida has risen significantly following vaccinated foreigners being allowed to travel to the United States since Nov. 8, 2021. 

With a favorable ecosystem for commercial investment, South Florida has become a top choice for many internationals especially since real estate prices are still relatively fair relative to other similar cities. Homebuyers have also begun to move out of Northeastern states that have a pretty heavy tax burden to settle in Florida which charges zero state income tax. 

Remote work has further allowed for this trend to take root and this has resulted in the demand for single-family properties in South Florida shooting through the roof. Statistics from January 2022 show that there was an 11.8% year-over-year increase for single/family homes ranging between $400,000 to $600,000, for a total of 397 transactions. Condo sales increased to 157 transactions, a 57% rise for properties ranging between $400,000 and $600,000. 

A booming S&P 500, record-low interest rates, and the rapidly increasing demand with limited supply are some other factors responsible for increased demand. 

What Can We Expect On the Broward County Foreclosure Auctions Scene?

Generally, the Broward County real estate market is relatively healthy, judging by the reducing number of distressed sales. Compared to January 2021 which had 1.7% of closed residential sales distressed comprising REOs and short sales, January 2022 recorded only 1.1%. 

Distressed sales in Broward County saw a drop from 41 to 29 representing a 29.3% reduction year-over-year in January of 2022. REOs comprised 0.6% while short sales represented 0.5% year-over-year of all sales that happened in Broward County in January 2022. This implies a year-over-year reduction of 37.5% and 17.6% for REOs and short sale transactions respectively. 

Going by the National Statistics, figures from Broward County aligned. National figures indicate that distressed sales made up less than 1% of the total sales made in January 2022, identical to statistics from 2021 as well. 

With such solid figures, foreclosure auctions would likely reduce significantly and the few properties available would have a lot of cash chasing. This is because the regular real estate scene is seeing a serious reduction in supply with demand steadily rising. 

This implies that many homebuyers would be exploring other alternatives and this would impact the foreclosure auction market as well. If the present trend continues, we could likely see only a trickle of foreclosure auctions that would very likely be a survival of the fittest game to see who scoops up the property. 

We would likely still see a year-over-year increase for each month. While it may not be too significant, following the pattern from the first four months of the year, there is a good possibility of that happening. 

Conclusion 

The real estate scene in Broward County and South Florida generally is presently buzzing with people in a buying frenzy. Foreclosure auctions would continue to take place even if property numbers reduce down the line. In addition, given that the market is somewhat volatile, we could see changes in this trend and a spike in foreclosure auctions.