New Home Sales Rise 11%

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New home sales across the United States rose 11% in the month of June. This rise has a lot to do with the drop in mortgage rates. Additionally, new home sales have noticed an increase of sales.

In Broward County, there were 78 new homes under construction in the second quarter of the year, as opposed to only 17 in the first quarter. Miami Dade shows a slight lag in new home sales and is correlated to the increased unemployment rate in Miami Dade County.
There is an influx of new homes that are vacant and ready for sale. Broward County has 2,725 newly constructed homes that are vacant. The average time that a property remains vacant in Broward County is approximately twelve months.

The 11% increase of sales also has a lot to do with the influx of distressed / bank owned properties. According to RealtyTrac, the second wave of foreclosures will be noticed in the coming months from those home owners who took out second loans and in the subprime market.

In Palm Beach County there were 213 single family homes ready to be moved into in the first quarter of the year, where there were only 139 in the first. Surprisingly, Palm Beach County accounted for more than half the total of the second quarter home sales in a 6county study conducted by Metrostudy’s.

There have been trends realized that show the amount of vacant properties are declining each quarter with the biggest drop in Palm Beach County. This is due to the increased amount of sales of distressed/foreclosed REO properties.

The National Association Of Realtors reported that the sales of existing homes were on the rise and that these distressed properties make up a vast majority of these sales. They also mentioned that with the second wave of foreclosures on the way, there is a pipeline of foreclosed properties that have yet to be released in the market and can carry well into next year, 2010.

The reasons that banks and lenders do not release all of their foreclosed properties are mainly for two reasons. First – There is a tremendous backlog of properties in which mountains of paperwork need to be completed including, foreclosing, evicting etc. In some cases foreclosure are done incorrectly and need to be redone. Second – If the foreclosed properties were released all at once into the market, home values would drop significantly in comparison to these distressed properties selling for less in a market that already has diminishing home values.

For more information for South Florida Foreclosures check back with us weekly at www.gsigllc.com