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Miami Foreclosures Still Dragging Down Home Prices

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By : John Cutts    99 or more times read
Miami foreclosures are still dragging down home prices, including the prices of high-end homes in Miami-Dade County and its suburbs.

The median sales price for pre-owned homes in the Miami metro area in March was $197,500, a drop of 4 percent from the price median one year ago, which was $205,600. As bank owned foreclosure houses attracted buyers because of their lower prices, total sales of previously owned homes in March shot up by 17 percent to 649 units, compared to 556 units in March last year.

Sales of condos also rose in March, due in part to the sharp surge in the number of low-priced condo units. During the month, sales of condos increased by 58 percent from 529 units to 835 units. The median sales price for existing condo units in March was $138,800, a drop of 8 percent from $151,000.

One of the more prominent properties affected by the downward price pressure from Miami foreclosures was the Pinecrest six-bedroom mansion of Miami Heat star Dwyane Wade, which was sold in March by Wade for only $2.5 million. Wade purchased the mansion in 2005 for $4 million, so he sold the property at a loss of $1.5 million, with the buyer getting a 37.5 percent discount.

Nevertheless, local realtors said Wade still got a better price than other owners of high-end homes who had to sell at much deeper discounts. Wade initially listed the mansion for $8.9 million in 2007 and then lowered the price to $6 million after 5 months. He again cut the price to $5 million after 8 months.

Without any purchase offer, the mansion was taken off from real estate listings in the first month of 2009. When it was relisted 4 months later, the price was further lowered to $3.3 million and again to $2.9 million in February.

The price reductions made on the Wade mansion illustrate the depth of the price impact of foreclosures on nondistressed properties. With Florida among the top four in charts of foreclosures by states, home prices are expected to be wallowing in the bottom for a while.

In March, more than 59,000 homes across Florida were notified of delinquency, foreclosure and lender repossession, including almost 8,700 units already in the real estate owned listings of banks.

In the neighborhood where the former Wade mansion is located, there are currently around 300 single-family houses for sale, a number of which are included in listings of Miami foreclosures.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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