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4 in 10 Broward home sales this summer involved a foreclosure

Homes in some stage of foreclosure accounted for a large portion of South Florida sales during the third quarter, a trend that likely will hinder the housing market indefinitely, analysts say.

About 42 percent of Broward County homes sold during the July-through-September period were in default, scheduled for auction or bank-owned, RealtyTrac Inc. said Thursday.

In Florida, Broward was second only to Miami-Dade County with 4,688 foreclosure-related sales in the quarter, down 6 percent from the second quarter.

Roughly 31 percent of Palm Beach County home sales involved a foreclosure during the period. The county had 2,303 foreclosure sales in the third quarter, up 2 percent from the second quarter.

Nationally, a quarter of all home sales involved a distressed property.

“Foreclosures are still a big part of the housing market because there’s such a built-in discount,” said Daren Blomquist, a spokesman for RealtyTrac, an Irvine, Calif.-based listing firm.

Foreclosure sales are expected to decline in the fourth quarter because of lender moratoriums that pulled many of those properties off the market in October. Some of the homes are slowly being marketed for sale again.

First-time buyers especially are attracted to these distressed homes because they’re usually priced well below market value.

Broward foreclosures sold for an average price of $122,202 during the third quarter, with the average discount 24 percent below the typical price of properties not in the foreclosure process, RealtyTrac said. The average price in Palm Beach County was $141,594, and the average discount 26 percent.

Across Florida, 37 percent of all home sales were foreclosure-related during the third quarter. In 2005, at the height of the housing boom, foreclosures made up only about 1 percent of all sales nationally.

It will take a couple more years to rid the South Florida market of distressed homes, said Charles Richardson, a regional senior vice president for Coldwell Banker.

“It’s an inevitable part of the recovery period,” he said.

While foreclosures and short sales are so common, many of the transactions fall through, real estate agents say. Buyers often don’t realize that these properties are beset with liens and other problems.

“Price-wise, they’re low, but you have to deal with all the other stuff that comes with that,” said Linda Hoyt, an agent in Broward County for Better Homes & Gardens Real Estate Florida First.

PJ Carswell of Balistreri Realty in Broward and Palm Beach counties said short sales are the most difficult transactions to maintain because banks are slow to respond to offers.

“When they do close, it’s a great deal,” she said. “But we lose a lot of buyers. It’s hard to keep them interested.”


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