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).