Condo foreclosure sales, cheap houses in South Florida have been rising as homeowners continue to lose their homes to foreclosure and as investors snap up properties in the residential and commercial sectors. Since the start of November, bulk investors looking for cheap real estate properties have purchased a total of 518 distressed condo units in Miami-Dade County, equivalent to 710,500 square feet of distressed condo space. The total purchase cost for 4 of the 5 bulk transactions was $43 million.
The fifth transaction involved 244 units at a Biscayne Bay condo project by Terra Group that secured a $120.5 million loan balance, including $28 million in interest. Craig Studnicky, head of International Sales Group, said that investors have been snapping up condo properties because they can buy them at up to 50 percent lower than their replacement costs.
Condo Vultures founder Peter Zalewski also said that mortgage lenders are cutting their prices to reduce their real estate inventories and delinquent notes. He contended that lenders are expecting a collapse in commercial real estate prices in the last months of 2010, so they have been stepping up their condo foreclosure sales, cheap houses to enable them to survive another major downturn in the property market.
Property analysts said that commercial property values will continue to fall as more business enterprises close, more people lose their jobs, more commercial tenants fail to pay rents, and more commercial owners and developers default on their mortgage loans. Among the more recent condo foreclosures in South Florida was the San Michele condominium project in the West Palm Beach area. A total of 182 units in this project were foreclosed by Alabama-based Regions Bank after developer Lucky Chase III failed to pay its balance of $15 million, including interests and taxes.
In 2005, Lucky Chase took out a loan of $45.5 million from Regions Bank to convert the 13-building 300-unit San Michele complex into condo complexes. The three-story buildings have amenities that include a playground, a pool, a volleyball and tennis court, and a clubhouse.
The developer sold a total of 118 condo units, including only 7 units this year. Regions Bank foreclosed on the 182 units that remained unsold.
In the single-family housing subsector, foreclosure sales, cheap houses also persist in Florida as foreclosure levels remain high despite a slight slowdown in foreclosure postings in October. Nearly 52,000 foreclosures were posted in Florida in October. |
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