Inventory of South Florida homes for sale falls, as buyers zero in on Palm ...

From deluge to dearth, South Florida's real estate market is shrinking as the number of homes for sale drops to its lowest amount since the economic bust of 2008.

About 49,900 residential properties in Palm Beach, Broward and Miami-Dade counties were listed for resale as of June 13, according to a report today from the Miami-based consultancy group Condo Vultures.

That's less than half of the nearly 108,000 homes for sale in November 2008.

Peter Zalewski, a principal with Condo Vultures, said the reduction is attributable to several factors such as investors picking up cheap homes and paperwork problems that continue to hold up foreclosure proceedings.

"Buyers, especially foreign investors with strong currencies, are scooping up South Florida properties at dramatic discounts due to the lack of financing available for domestic buyers," Zalewski said.

The inventory report includes single-family homes, townhomes and condominiums.

While the report offers some good news for South Florida real estate - fewer homes means more competitive pricing - it notes that the 1.3 million-resident Palm Beach County carries the largest share of the inventory with 17,800 homes.

But that may not be for long. Another report released today by Realtor.com found that Palm Beach County was the 10th most searched real estate market in the nation in May.

The Tampa-St.Petersburg area was the only other Florida region to make it into the top 10 most searched areas, ranking 5th nationwide.

"As downtown Miami has stabilized, investors started looking to Broward and as that stabilizes, they will make Palm Beach their end destination," Zalewski said.

Bill Richardson, president of the Realtors Association of the Palm Beaches, said he's been watching the inventory of homes fall for the past six months.

"I think this is good news, but we're not out of the woods," said Richardson, who is managing broker for the Keyes Company in Boca Raton. "We don't want to be totally dependent on cash buyers and foreign investment. That's not a long-term solution."

And does the dwindling inventory mean now is the time to buy?

Not necessarily said Jack McCabe, a real estate consultant in Deerfield Beach.

He predicts banks will soon rebound from the fall's robo-signing scandal, pushing more distressed homes on the market and causing further pricing tumult. Of the 40,050 South Florida homes that have sold so far this year, 46 percent were either short sales or bank repossessions, according to the Condo Vultures report.

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Delavaco Properties LP plans to spend as much as $30 million this year and $40 million in 2012 to buy bank-owned houses and condominiums in foreclosure-ridden South Florida. The private-equity fund will pay cash.

As lenders tighten mortgage standards and consumers stay on the sidelines amid a five-year slide in home prices, all-cash purchases are surging. The deals are done mostly by investors who can get properties for less than buyers needing loans, fix them up and resell or rent them.

“If there weren’t vultures out there, you’d have a city of dead carcasses,” Robert Theocles, an independent consultant for Fort Lauderdale, Florida-based Delavaco, said in a telephone interview. “It’s like the circle of life.”

A record 33 percent of existing-home sales were made to cash buyers in February, when an annualized 4.88 million properties changed hands, the National Association of Realtors reported March 21. That compares with 15 percent of the 4.82 million annualized sales when the Chicago-based trade group started monthly tracking of such purchases in October 2008.

In Florida’s Broward County, where Theocles is based, deals with no mortgages made up 69 percent of sales in February, according to Southeast Florida Multiple Listing Service data.

The national sales data don’t count homes bought in foreclosure auctions on courthouse steps, which are almost all cash-only transactions. The “lion’s share” of all-cash purchases are by investors, according to Walter Molony, a spokesman for the Realtors association, though the group doesn’t keep specific numbers. Big Cash Cities

About half of all purchases were done with cash in the Miami, Las Vegas and Phoenix areas, where prices have plunged and bank-owned properties abound because of high foreclosure rates, said Oliver Chang, a housing-market analyst with Morgan Stanley (MS), the New York-based investment bank.

Cash sales in those cities — as well as in Chicago, Cleveland, Los Angeles, New York, Seattle, San Francisco and Washington — rose to 199,557 homes last year compared with 138,888 in 2004, according to a March 21 report co-written by Chang. Short sales, where the bank accepts less than the principal on a loan, and foreclosures accounted for 59 percent of last year’s cash sales, up from 10 percent in 2004, Morgan Stanley reported.

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