Twin Cities Foreclosure & Short Sale Report 2009 Q3

Foreclosures and short sales

in the Twin Cities Housing

Market

Q3 2009 Update

A Special Research Report from the Minneapolis Area Association of REALTORS

®

www.mplsrealtor.com

Lender-owned foreclosure inventory available for sale in theTwin Cities has fallen by 60 percent in the last year, fallingfrom an estimated 4,886 at the end of last September to1,960 this year. Short sales are a different story—basicallyholding steady over the last twelve months (Figure 1).Lender-owned foreclosures now account for only 7.9percent of the total inventory, while short sales represent17.4 percent of total inventory.The simple reason for this growing chasm is thatforeclosures are selling roughly three times as frequentlyas short sales (Figure 2). Short sales are complicatedtransactions and many consumers have reportedconsiderable delays and uncertainties associated withmaking an offer on a short sale home. These complicationsare likely the main cause of the relatively quiet sales activity.

Foreclosures are properties in which the fnancial

institution has repossessed the home from the owner dueto nonpayment of mortgage obligations. Short sales are

unique arrangements where the fnancial institution and in-

default homeowner work together in an attempt to sell thehome before it is foreclosed upon.It’s encouraging to see the number of vacant foreclosuresdrop as they’re absorbed by new homeowners. Butit’s discouraging to see that short sales remain such asubstantial drag on the market’s forward momentum,especially when we consider that a portion of these shortsales will eventually become lender-owned foreclosures.For more information on the difference between theforeclosure market and the short sale market, take a look atpages 5 to 7 of this report.

Want to see how foreclosures and short sales are affectingvarious neighborhoods and cities within the Twin Citiesmetro area? Click here to access an interactive data board and in-depth neighborhood reports and commentary.Published on October 15, 2009Jeff Allen

MAAR Research Managerwww.mplsrealtor.com

Aaron Dickinson

REALTOR

®

www.twincitiesrealestateblog.com

Figure 1

|

Foreclosure Inventory DeclinesFigure 2

|

Foreclosures Sell Three Times as Often as Short Sales

®

| Sponsored by Royal Credit Union www.rcu.org

Inventory of Homes for Sale

10-200810-2009Change10-200810-2009Change10-200810-2009Change

All Properties

8,5426,245- 26.9%23,51118,584- 21.0%32,05324,829- 22.5%

Single-Family Detached

6,5754,408- 33.0%16,06213,147- 18.1%22,63717,555- 22.4%

Townhomes*

1,5451,402- 9.3%4,7653,358- 29.5%6,3104,760- 24.6%

Condominiums

422435+ 3.1%2,6842,079- 22.5%3,1062,514- 19.1%

*Includes twinhomes

10-200810-2009Change10-200810-2009Change10-200810-2009Change

Under $120,000

3,1381,925- 38.7%1,4211,239- 12.8%4,5593,164- 30.6%

$120,001 to $150,000

1,5741,157- 26.5%1,9911,488- 25.3%3,5652,645- 25.8%

$150,001 to $190,000

1,4851,249- 15.9%3,8292,846- 25.7%5,3144,095- 22.9%

$190,001 to $250,000

1,106898- 18.8%5,0473,859- 23.5%6,1534,757- 22.7%

$250,001 to $350,000

642516- 19.6%4,5263,528- 22.1%5,1684,044- 21.7%

$350,001 to $500,000

355305- 14.1%3,2642,553- 21.8%3,6192,858- 21.0%

$500,001 to $1,000,001

220168- 23.6%2,6392,284- 13.5%2,8592,452- 14.2%

$1,000,001 and above

2227+ 22.7%797787- 1.3%819814- 0.6%

All Prices

8,5426,245- 26.9%23,51418,584- 21.0%32,05624,829- 22.5%

Property TypePrice Range

26.6%25.2%

2.7%3.3%9.8%10.7%7.7%6.9%18.0%18.9%12.4%12.8%44.2%43.7%27.9%30.5%68.8%60.8%

Lender-MediatedTraditional

Share of Total InventoryThat Is Lender-Mediated10-200810-2009

Total

24.5%13.6%

25.2%

25.1%29.5%17.3%

Lender-MediatedTraditional

26.6%

29.0%

Total

Share of Total InventoryThat Is Lender-Mediated10-200810-2009

Lender-Mediated Homes for Sale

6,5751,5454224,4081,402435

Single-Family DetachedTownhomesCondominiums10-200810-2009

Lender-Mediated Homes for Sale

3,1381,5741,4851,106642355220221,9251,1571,24989851630516827

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

10-200810-2009

There are almost 2,300fewer lender-mediatedhomes available for saleright now than there werea year ago, but they stillcomprise roughly onequarter of all availableinventory.Inventory is down in everyprice category but hasdropped the fastest in thelower price ranges. Lender-mediated inventory hasactually grown in the $1million and higher segment,but only slightly.

Median Prices

Q32007Q32008Q320091-Yr ChangeQ32007Q32008Q320091-Yr ChangeQ32007Q32008Q320091-Yr Change

All Properties

$165,000$145,000$125,000- 13.8%$236,500$222,500$207,500- 6.7%$229,900$198,000$174,000- 12.1%

Single-Family Detached

$175,000$151,000$133,000- 11.9%$258,246$239,000$223,000- 6.7%$250,000$213,000$189,000- 11.3%

Townhomes*

$148,000$131,500$111,000- 15.6%$187,000$180,000$164,000- 8.9%$184,000$166,925$142,500- 14.6%

Condominiums

$111,500$104,545$91,125- 12.8%$176,150$170,000$153,615- 9.6%$171,900$160,000$134,900- 15.7%

*Includes twinhomes

Lender-MediatedTraditionalTotalQ1 Median Sales Prices

$229,900$165,000$236,500$198,000$145,000$222,500$174,000$125,000$207,500

TotalLender-MediatedTraditionalQ32007Q32008Q32009

- 13.8%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.- 6.7%- 12.1%- 13.9%- 12.1%- 5.9%

Historical Median Sales Prices

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