Wednesday, June 18, 2008

Close Look at Short Sale & Foreclosure Market—Twin Cities Homeowner Equity Safer than Indicated

Most media reports have been exclaiming the double digit drop in housing values in the Minneapolis/St. Paul metro area since the beginning of 2008. The RMLS numbers showed a drastic decline in the values of homes from Anoka to Ramsey to Washington Counties. It seemed that no area in the 13 county Twin Cities metro area was completely immune to the pressure the reported up to 2% foreclosure rate was putting on the housing market.

The numbers are staggering when looked at as a whole…but what if the foreclosures and short sales could be filtered out? Reality is that in most areas few than 2% of properties are in foreclosure in the metro market. But many more homeowners are sitting at home nervously watching the news reports touting the ‘gloom and doom’ and believe the equity is draining from their homes like a flood prone levee. Is this picture accurate?

Intuitively, I knew the answer was no. Or at the very least it was incomplete. Homes being sold in the market by a traditional seller, without a bank or corporate entity involved, are appearing to hold their value somewhat better than other homes. But I had no way to back up what I believed I was seeing until now.

A local Minneapolis Realtor,
Aaron Dickinson and Jeff Allen, the research manager of the Minneapolis Area Association of Realtors (MMAR) teamed up to find the answer. They created a report entitled Foreclosures and Short Sales in the Twin Cities Housing Market. This report shows that significantly more bank-owned and mediated homes are currently listed than two years ago…nearly 10 times more! The report also goes on to show that while the median sales price for the foreclosed homes are down almost 16%, homes sold by traditional sellers is only down about 3.5% from 2006 to 2008. 

This is awesome news for Twin Cities homeowners frightened that their largest single investment is draining in value daily as more foreclosures hit the market. Rest assured that while this changed housing market IS affecting the property values during this time of correction, we are not in a freefall throughout the metro area.

Other Real Estate Related Articles that might be of interest:

If you are buying, selling or relocating to Minnesota and need help from a professional Realtor to better understand this changed real estate market, give me a call or visit my website for a FREE Relocation Packet. I specialize in acreage and lakeshore properties in the north and east Twin Cities metro area including Ham Lake, Lino Lakes and all communities in the Forest Lake School District! Serving Anoka, Chisago, Ramsey and Washington Counties in Minnesota.

Copyright 2008