Foreclosures and Short Sales

Foreclosures and short sales

in the Twin Cities Housing

Market

Q2 2009 Update

A Special Research Report from the Minneapolis Area Association of REALTORS

®

www.mplsrealtor.com

he number of foreclosures and short salesavailable for sale in the Twin Cities housing marketcontinued its dramatic fall in the second quarterof 2009. From February 1st to July 1st the supply of these homes available has dropped over 2,100 unitsto 6,685

(Figure 1

).New data available indicates that the supply picturefor bank-owned foreclosures excluding short saleslooks even more extreme. There were only 1.84bank-owned foreclosure homes available for eachsale in June—compared to 5.10 homes ownedby a traditional seller and 10.22 homes in a shortsale situation

(Figure 2)

, according to our analysis

of two new data elds in the Regional Multiple

Listing Service. In sum, the supply of bank-ownedforeclosures is dwindling quickly.

Because these elds are only a few months

old these numbers are not perfectly reliable.Nonetheless, they offer a relatively clear picture of the differences between the bank-owned foreclosuremarket and the short sale market that must berecognized by consumers.

Foreclosures are properties in which the nancial

institution has repossessed the home from theowner due to nonpayment of mortgage obligations.Short sales are unique arrangements where the

nancial institution and in-default homeowner work

together in an attempt to sell the home before it isforeclosed upon.

Want to see how foreclosures and short sales areaffecting various neighborhoods and cities withinthe Twin Cities metro area?Click hereto access aninteractive data board and in-depth neighborhoodreports and commentary.

T

Published on July 20, 2009Jeff Allen

MAAR Research Manager

www.mplsrealtor.com

Aaron Dickinson

REALTOR

®

www.twincitiesrealestateblog.com

Figure 1

|

Inventory of Lender-Mediated Homes for Sale Dropping Quickly

Figure 2

|

Houses Available Per Buyer: June 2009

®

| Sponsored by Royal Credit Union www.rcu.org

Inventory of Homes for Sale

7-20087-2009Change7-20087-2009Change7-20087-2009Change

All Properties

8,1636,685- 18.1%26,12419,837- 24.1%34,28726,522- 22.6%

Single-Family Detached

6,3084,757- 24.6%17,66913,682- 22.6%23,97718,439- 23.1%

Townhomes*

1,4511,498+ 3.2%5,5523,813- 31.3%7,0035,311- 24.2%

Condominiums

404430+ 6.4%2,9032,342- 19.3%3,3072,772- 16.2%

*Includes twinhomes

7-20087-2009Change7-20087-2009Change7-20087-2009Change

Under $120,000

2,6812,258- 15.8%1,4651,294- 11.7%4,1463,552- 14.3%

$120,001 to $150,000

1,4811,195- 19.3%2,1151,668- 21.1%3,5962,863- 20.4%

$150,001 to $190,000

1,5491,228- 20.7%4,5113,112- 31.0%6,0604,340- 28.4%

$190,001 to $250,000

1,152896- 22.2%5,8403,943- 32.5%6,9924,839- 30.8%

$250,001 to $350,000

712575- 19.2%5,1753,837- 25.9%5,8874,412- 25.1%

$350,001 to $500,000

360291- 19.2%3,4442,687- 22.0%3,8042,978- 21.7%

$500,001 to $1,000,001

204202- 1.0%2,7712,445- 11.8%2,9752,647- 11.0%

$1,000,001 and above

2540+ 60.0%804851+ 5.8%829891+ 7.5%

All Prices

8,1646,685- 18.1%26,12519,837- 24.1%34,28926,522- 22.7%Share of Total InventoryThat Is Lender-Mediated7-20087-2009

Lender-MediatedTraditional

23.8%

26.3%

Total

20.7%12.2%

25.2%

25.8%28.2%15.5%64.7%63.6%

Lender-MediatedTraditional

Share of Total InventoryThat Is Lender-Mediated7-20087-2009

Total

41.2%41.7%25.6%28.3%16.5%18.5%12.1%13.0%

Property TypePrice Range

23.8%25.2%

3.0%4.5%9.5%9.8%6.9%7.6%

Lender-Mediated Inventory of Homes for Sale

23.8%26.3%20.7%12.2%25.2%25.8%28.2%15.5%

All PropertiesSingle-Family DetachedTownhomes*Condominiums7-20087-2009

Share of Inventory That Is Lender-Mediated

64.7%41.2%25.6%16.5%12.1%9.5%6.9%3.0%63.6%41.7%28.3%18.5%13.0%9.8%7.6%4.5%

Under $120,000$120,001 to$150,000$150,001 to$190,000$190,001 to$250,000$250,001 to$350,000$350,001 to$500,000$500,001 to$1,000,001$1,000,001 andabove

7-20087-2009

There are now almost1,500 fewer lender-mediated homes for salethan there was a year ago.Townhomes andcondominiums still haveroughly the same amountof lender-mediatedinventory, while the singlefamily detached markethas seen a huge drop.Lender-mediated inventory isdown in every price categoryexcept above $1 million,where it has increased 60.0percent in the last year. Bear in mind: that’s still only 4.5percent of the inventory inthat price range.

Median Prices

Q22007Q22008Q220091-Yr ChangeQ22007Q22008Q220091-Yr ChangeQ22007Q22008Q220091-Yr Change

All Properties

$170,000$150,000$120,000- 20.0%$235,000$225,000$209,000- 7.1%$228,900$207,000$167,500- 19.1%

Single-Family Detached

$179,000$157,000$126,500- 19.4%$255,000$240,000$222,700- 7.2%$248,000$220,000$180,000- 18.2%

Townhomes*

$153,500$139,000$109,900- 20.9%$190,000$179,995$162,000- 10.0%$186,050$170,000$139,874- 17.7%

Condominiums

$93,000$102,500$83,750- 18.3%$172,250$177,976$155,000- 12.9%$169,900$169,900$130,000- 23.5%

*Includes twinhomes

Lender-MediatedTraditionalTotalQ1 Median Sales Prices

$228,900$170,000$235,000$207,000$150,000$225,000$167,500$120,000$209,000

TotalLender-MediatedTraditionalQ22007Q22008Q22009

- 20.0%For all property types, homeprices in the traditionalmarket haven’t declined asprecipitously as the lender-mediated market.The overall median salesprice for all properties isskewed downward by theincreased market share of foreclosures and shortsales.- 7.1%- 19.1%- 9.6%- 11.8%- 4.3%

Historical Median Sales Prices

$100,000$120,000$140,000$160,000$180,000$200,000$220,000$240,000$260,000