So how are foreclosures impacting our local market conditions? Here's the highlights from a recent report from the Minneapolis Area Association of Realtors (MAAR)...
Foreclosures and short sales continue to increase their market share in the Twin Cities housing market. Nearly one in three sales falls into the ‘lender mediated’ category (LM). Historically LM sales account for three to four percent of all sales. The Q3 report released by the Minneapolis Area Association of Realtors again points to a tale of two markets, lender mediated and traditional re-sale homes. The number of lender mediated properties for sale continues to grow significantly, while traditional sellers hold back in response to a slower market.
Historically, the seasonal change in our market narrows the gap between supply and demand. Many traditional sellers take their homes off the market until after the holiday season or will wait until the Spring market. In my opinion November through February are some of the best months for sellers with less competition and serious buyers in the marketplace.
According to the report, there is a direct relationship between price range and LM activity. The lower the price, the more common foreclosures and short sales become. The increased volume of LM properties is dragging down the overall median price skewing the true picture of each segment. Traditional properties are experiencing softer declines in median sale price, primarily due to increase supply and price competition from the LM homes. Many top agents will characterize the market as a ‘price war and a beauty contest.’ LM properties values have declined because they can only compete on price due to their distressed condition. Traditional sellers can improve their odds by selling in premium condition. In today’s market conditions, price and condition are key to selling in a reasonable timeframe and for top dollar.
Here's the link to the full report