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Foreclosures and Short Sales Skewing Twin Cities MLS Statistics

In the first quarter of 2007, sold homes reported by the MLS were 90% “Traditional Sellers” and 10% “Bank Mediated Sellers” (bank owned foreclosures and/or short sales).

In the first quarter of 2008, these “bank mediated” listings comprised more than 27% of the sales. The Median Sales Price of homes sold by Traditional Sellers in Q1 2008 was $220,000, down only 3.9% in the last 12 months, while the Median Sales Price for the bank mediated listings was only $155,000, down a substantial 10.4% in the last 12 months. With the help of a little statistics background, it becomes clear to see why the Twin Cities Median Sales Price fell so far… the substantial increase of foreclosures and short sales selling through completely changed the product mix and ultimately the median price point.

If you refer to the report I just co-authored on Foreclosures & Short Sales on the MLS in the Twin Cities, you’ll see that if you exclude the “bank mediated” listings from the statistics, Median Sales Price is only down 3.9% over last year vs. the current MAAR-quoted composite Media Sales Price decline of 9.7%.

What does this all mean?  Traditional Sellers are getting far closer to what they would have received last year than the bank mediated properties, and since Traditional Sellers still make up nearly 3/4ths of the market, that means this market hasn’t fallen nearly as far as some think (and as some hope).

pf button both Foreclosures and Short Sales Skewing Twin Cities MLS Statistics
5 comments
West Terrace
West Terrace

Well-written article. It's such a relief that things pretty much turned out fine. It's great to be able to look back to hard times and realize that we made it through. Now, the great thing about real estate is that there are quite a number of foreclosed properties available. This is a great opportunity to invest in a great, reasonably-priced property.

The Cottages on Government Way
The Cottages on Government Way

Thanks for all the input! I like how you ended on a hopeful note. The market is definitely on a low point, what with foreclosures happening left and right. But keep in mind that there have been far worse scenarios than ours today.

Foreclosure Listings Angel
Foreclosure Listings Angel

Great, report, I need to check it out. But isn't the foreclosures included figure still a relevant number considering all these homes are still on the market? It's not like some buyers are only looking for non-foreclosures, in which case that figure would be pertinent. but ultimately they are all on the same playing field.

Aaron Dickinson - Edina Realty
Aaron Dickinson - Edina Realty

There are still many ARMs to reset but the indexes for those interest rate resets are also down substantially from their highs so the rates will not bounce as high as they would have prior to the FED cuts. I don't expect us to get out of this whole mess until at least 2009 but inventory for sale in the Twin Cities is down slightly year-over-year... a first since this market started gaining inventory back in 2002.

ryan l
ryan l

I love your optimism. I was just looking at the national maps that the FED has put up showing percentages of foreclosures, percentage of arm loans yet to reset etc. Combine those figures with the MNs heavily skewed retail driven business environment(Bestbuy,Target,Supervalu)that are being hammered by inflation and transportation costs and couple it all with the census homeownership rate data for our state that shows far to many owning homes. Man oh man, I see a bad situation only getting worse.

Trackbacks

  1. [...] The gist of this 5-page report is that if you were to take all the foreclosure and short-sale properties out of the equation, then plain vanilla sellers like me aren’t facing the 10% price thrashing that is being crowed out there. Instead it’s closer to 4% – a much more stomachable deal. I encourage you to read the whole report available HERE. [...]

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TwinCitiesRealEstateBlog.com is not a Multiple Listing Service MLS, nor does it offer MLS access.
This website is a service of Aaron Dickinson of Edina Realty, a broker Participant of the Regional Multiple Listing Service of Minnesota, Inc.