Just in time for Halloween, RealtyTrac has issued a new report on so-called “vampire” foreclosures.
Vampire foreclosures are defined as homes that have gone through the court proceedings and are bank owned, but are still occupied by their previous owners.
Why would the previous owners still live in them? Because they can, said Daren Blomquist, a vice president at the Irvine, Calif.-based RealtyTrac.
“They are accustomed to living there for free without any consequence,” Blomquist said. “And up until recently, the banks have not had a huge motivation to kick them out because home prices were not increasing and the banks had so many properties they were dealing with.”
Nationwide, 47 percent of bank-owned homes are occupied by their previous owners. It’s slightly higher in Florida at 53 percent. In Palm Beach County, 49 percent of bank-owned homes are lived in by their former owners, according to RealtyTrac.
Blomquist said vampire foreclosures will slow price appreciation as they start to go up for sale and tilt real estate more to a buyer’s market.
“These are still distressed properties and will typically sell at a cheaper price,” he said.
A slowdown, and even a decline, in asking prices has already been measured by online real estate analysis firm Trulia. According to a third-quarter report, Palm Beach County asking prices were down 4.6 percent from the second quarter, but still up 5.2 percent from the same time in 2012.
Jed Kolko, chief economist for Trulia, said expanding inventory and a decrease in investor activity is leading sellers to lower their expectations.
“Asking home prices give us the first look at where home sale prices are headed, and they point to a slowdown,” Kolko said.
Top condo price
A lavish oceanfront penthouse in Boca Raton that was never lived in by its owners is on the market for $13.95 million, making it the most expensive condo listing in all of Palm Beach County as of last week.
The One Thousand Ocean penthouse was purchased in 2011 for $10.4 million by a couple looking for the kind of high-end luxury more abundantly found in waterfront Miami properties, said listing agent Senada Adzem, of Douglas Elliman Real Estate.
They put in $3.5 million to remodel and furnish the unit, which overlooks the Boca Raton Inlet, but realized when it was finished that most of their friends live in Palm Beach. That’s a 25-mile journey they didn’t want to make a routine.
Adzem, who was the head of marketing and sales for One thousand Ocean when the developer was still selling units, said the penthouse has been on the market for about 40 days.
“We have had showings every day,” Adzem said. “We’re at $2,000 a square foot and for Palm Beach County that may be considered high, but the difference is we never had a product like this before that can compete with what’s available in Miami.”
The One Thousand Ocean penthouse has 10,819 square feet, including 4,000 square feet of “resort infused” terrace with a private pool and view of the Boca Raton inlet.
Other highlights include oak and slate floors, a gourmet kitchen with Miele appliances, and a Calcutta Marble master bath with Dornbracht faucets.
The 53-unit condominium is built on the grounds of the storied Boca Raton Resort and Club. All but one unit has been sold even though the community broke ground and finished during the real estate market’s dark days.
Pre-development sales began at the end of 2006 when the market had just hit its peak.
“To be honest, it was the worst timing when you consider how tough it’s been since then,” Adzem said. “Even on this level, people who are extraordinarily wealthy, they too felt the recession.”