Foreclosures and Short Sales Skewing Twin Cities MLS Statistics
5 May 2008 by Aaron Dickinson - Edina Realty
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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).
3 Responses to “Foreclosures and Short Sales Skewing Twin Cities MLS Statistics”
May 7th, 2008 at 12:09 pm
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.
May 7th, 2008 at 1:07 pm
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.
May 8th, 2008 at 10:18 am
[...] 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. [...]