The number of properties heading to the market may be much larger than anyone thought and appears likely to swamp South Florida with more deeply discounted homes, clouding the prospects for a housing recovery.
Figures from the Florida Association of Realtors released Friday show that South Florida's median home prices have stabilized over the past several months and sales are up year-over-year as the number of properties on the market shrinks.
But an analysis of the so-called shadow market done for The Miami Herald suggests the number of homes and condos in the pipeline to come on the market in South Florida is nearly five times larger than all residential properties currently listed for sale by Realtors. LPS Applied Analytics, a firm that supplies loan data to the federal government, did the analysis on the shadow market, which refers to properties that will eventually be listed for sale -- because they are about to enter foreclosure, are in foreclosure or already owned by banks.
Economists and real estate analysts say the forces of supply and demand mean prices have further to fall because there will be more homes on the market than people to buy them, forcing sellers -- in this case, banks that have taken homes back in foreclosures -- to further cut prices.
"That's what everybody is afraid of," said Jesse Acevedo, president of the Realtor Association of Greater Fort Lauderdale.