Recently released data from RealtyTrac, shows that overall foreclosure rates are trending down 23% through October 2013, but foreclosure activity on homes in the $5 million-plus range is up 61% from the same period last year. Although these high-end properties account for a tiny portion of the market, less than a total of 200 in 2013, the financial impact on a foreclosing lender can be significant.
“A home selling for $5 million or above represents the ultra-luxury end of the market, and so far in 2013 we’ve had 34 properties close over that price with the average sale being $7.7 million,” said Emmett Laffey, CEO of Laffey Fine Home International, covering the five boroughs of New York. “Any foreclosure properties in this type of ultra-luxury market usually get purchased very quickly since there is one thing all super rich buyers’ want, an outstanding deal on a real estate transaction, and in most cases foreclosures of this magnitude come with several million more dollars of built-in value.”
Even though California high-end foreclosures are down from a year ago, RealtyTrac still reported that “Florida and California together accounted for more than 60 percent of all ultra-high-end foreclosure activity” in 2013.
Leading the market for luxury home foreclosures is Miami, Fort Lauderdale, and Pompano Beach in Florida. Other national hotspots include Los Angeles and Orange Counties, California; Fulton and Cobb Counties, Georgia; Orange County, Florida; Long Island New York and Northern New Jersey respectively.