By Gay Cororaton, MIAMI REALTORS Chief Economist
The low level of distressed sales is arguably the most telling indicator that today’s housing market is nowhere like that of the Great Recession.
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Sales of foreclosed homes and short sales (“distressed sales”) during January-July 2025 in the counties of Southeast Florida fell to 0.8% of total sales, the lowest share since the Great Recession, making up just 0.8% of total sales.
The current share of distressed sales is even lower than the pre-pandemic share in 2019 when distressed sales accounted for 4.1% of total sales.
During the Great Recession years of 2009-2010, the share peaked to nearly 50% in 2009 and 2010 and trended at above 10% through 2016.
Numerically, there were altogether 375 distressed sales over the period January-July 2025 (annualized to 643 sales) in the counties of Miami-Dade, Broward, Palm Beach, Martin, and St. Lucie. In 2019, there were 3,924 distressed sales. During 2009-2012, there were nearly 40,000 distressed sales annually.
MIAMI’s analysis of county records reveals very low levels of homes that are currently in the process of foreclosure or that are bank-owned (Real estate owned or REOs). In Miami-Dade County, there were 1,466 single-family, condominiums, and townhomes that were in the process of foreclosure or bank-owned as of August 30, 2025, equivalent to 1.3 homes per 1,000 existing housing units. Miami-Dade County has the lowest homes in foreclosure or REO to total housing units: Miami-Dade (1.3), Broward (1.4), Palm Beach (3.0), Martin (1.9), and St. Lucie (4.0).
Several reasons could explain why distressed sales have remained low in this cyclical downturn.
First, the tighter underwriting standards since the Great Recession have created a homebuyer pool with better ability to weather tough economic conditions.
Second, home prices have not collapsed to the same degree during this cyclical downturn compared to the decline in home prices since the Great Recession. In Miami-Dade County, the median single-family sales price has increased 77% since July 2019, and the median sales price is 12% higher than in July 2022 as mortgage rates started to reset higher.
Prices have remained firm as supply conditions are relatively tighter today compared to the Great Recession. In Miami-Dade County, the month’s supply of single-family inventory is at 7 months’ supply as of July 2025, a far cry from the 15 months’ supply during the Great Recession in July 2010.
Supply conditions have remained tight because even as buyers got sidelined from higher mortgage rates, the mortgage rate lock effect reined in homeowners from listing their homes. Around 90% of homeowners with a mortgage have mortgage rates of 6% or lower.
Homeowners are also veering towards renting out than selling, apparently waiting for prices to recover. MIAMI’s analysis shows a rising share of single-family listings for rent to total for-sale and for rent listings on the MIAMI MLS, with the single-family rental share rising to 37% in July 2025 compared to 25% in July 2022 (Southeast-FL-RentalReport_July2025.pdf)
MIAMI’s analysis also shows that homebuyers have accumulated significant home equity, hovering at 80% equity for buyers who purchased a home 15 years ago. These homeowners are likely to wait for market conditions to improve to sell their homes. MIAMI-Cities-Housing-Wealth-Report_2025Q2.pdf
