2011 may have marked the bottom of the real estate market in the Twin Cities, or at least we hope so. The Minneapolis Area Association of Realtors 2011 year-end report is out and this is the report on the Distressed Sales for 2011.
An astonishing 50% of the properties sold in 2011 were Distressed, meaning Short Sales or Foreclosures. It is little wonder why the Median Sales Price seemed to plummet in the Twin Cities in 2011.
The top area for distressed market share were primarily the “exurbs”. A couple of theories for this might be, those areas may have a lot of the Trades people there – carpenters, HVAC, roofers, drywallers etc. The housing industry was hit hard, and so were the Trades people’s income as a result. The price of gasoline soaring also might have played a role in this making the commute less desirable. I don’t believe those areas were subject to any different loans than the other areas, but I could be wrong.
Below shows us a better picture of the Median Sales Price plummet we kept reading about from Case Shiller and other home price indexes. A brutal -33.3% drop in median sales price over the last 4 years. If you break this apart by sale type like MAAR did here, it makes a little more sense. Traditional Sales median prices are down -14.1% over the same 4 year period while Short Sales are down -29.3% and Foreclosures median prices down -32.5%.
This reflective of Condition of the Home as well as the bargaining position of the buyers. I don’t expect 2012 will be nearly as bad, as I expect we will work off more foreclosures and begin to see prices stabilize. There are areas in the Twin Cities that may begin to see prices increase this year.
- St. Thomas real estate analysis of traditional-sale home prices shows one-third the decline indicated by Case-Shiller (craigkamman.com)
- 2011 Annual Real Estate Report, part 1 (craigkamman.com)
- Distressed Real Estate: Down to 28 Percent of the Market (economistsoutlook.blogs.realtor.org)