The practice of lumping Miami into one big bowl of lukewarm housing gazpacho for the past decade gives me an upset stomach. Since I began reporting on the Miami market for Douglas Elliman a while back (and have since expanded coverage to Boca Raton, Fort Lauderdale and Palm Beach), I’ve been obsessed with Miami’s split personality – distressed (foreclosure + short sales) versus non-distressed markets. While they’re not mutually exclusive markets, they do have different price points and trends.

To make up to Curbed Miami for just sitting on the beach I made three charts for this week’s 3CW to explore the two different markets of Miami real estate.

Non-Distressed Market (any sale that’s not a short sale or foreclosure sale): Nearly 60% of Miami sales are now non-distressed, nearly double the market share of 35.3% in 1Q 2011. Why? It’s really a combination of the influx of foreign buyers from Europe and South America as well as the fall off in foreclosure sales (short sales didn’t fall off). It’s making the overall market show double digit price gains (not part of this chart, but trust me), when in fact, the market is fairly stable in pricing. Average sale prices reached $561,912 in the second quarter, 3.5 times the average sales price of the distressed market and 1.1% above year ago levels.

Distressed Market (any short sale or foreclosure sale): The average price of a distressed sale was $161,055 in the second quarter, 5.3% above the year ago level. Market share has plummeted largely due to the decline in foreclosures, NOT short sales.

Short Sales versus Foreclosures (subset of the distressed market); Lenders and servicers held back a lot of their foreclosure activity in 2011 and early 2012 after the 2010 robo-signing scandal. They also learned a very important lesson in that period: Short sales are a lot cheaper than foreclosures – it allows them to recover much more of the collateral they lost. With the Florida court system foreclosure backlog, we may very well see a low level of foreclosures – more than now but less than a few years ago and a LOT more short sales.

Keep these items in mind as you follow the Miami housing market over the next year and you’ll avoid being in the soup.

· Three Cents Worth [Curbed Miami]