Foreclosures and short sales

Transcription

1 Foreclosures and short sales in the Twin Cities Housing Market Update A Special Research Report from the Minneapolis Area Association of REALTORS Jeff Allen MAAR Research Manager Aaron Dickinson REALTOR Published on August 14, T he unfortunate growth of foreclosures and short sales (i.e., lender-mediated properties) has had substantial effects on the Twin Cities housing market and doesn t appear to be going away anytime soon. This lender-mediated activity has significantly different effects than traditional real estate because a lender is intimately involved in the transaction either by acting as the current owner/seller in the case of a foreclosure or as a less-direct intermediary with approval powers in the case of a short sale. Foreclosures are properties in which the financial institution has repossessed the home from the owner due to nonpayment of mortgage obligations. Short sales are unique arrangements where the financial institution and in-default homeowner work together in an attempt to sell the home before it is foreclosed upon. Table of Contents Downtown St. Paul Inventory of Homes for Sale Median Sales Price New Listings and Closed Sales Appendix A: MLS Area Breakdown Appendix B: Municipality Breakdown Explanation of Methodology Building upon the unique methodology introduced with the initial report, this Update digs further, providing new analysis by MLS area, city, property type and price range. What follows is a detailed and up-to-date picture of the role of lender-mediated properties in the local housing market.

2 Inventory of Homes for Sale Property Type All Properties 3,722 7, % 30,879 25, % 34,601 33, % Single-Family Detached 2,972 5, % 20,969 17, % 23,941 23, % Townhomes* 584 1, % 6,473 5, % 7,057 6, % Condominiums % 3,437 2, % 3,603 3, % *Includes twinhomes Traditional of Inventory That Is % 12.4% 8.3% 4.6% 21.7% 23.5% 20.3% 10.8% of Inventory That Is 23.5% 21.7% 12.4% 10.8% 8.3% 20.3% % Over the past year, the inventory of lender-mediated properties for sale has almost doubled, while traditional inventory has declined by 16 percent. 4.6% All Properties Single-Family Detached Townhomes* Condominiums Price Range Traditional Under $120, , % 1,119 1, % 1,860 3, % $120,001 to $150, , % 1,943 1, % 2,522 3, % $150,001 to $190, , % 5,012 4, % 5,891 5, % $190,001 to $250, , % 7,665 5, % 8,437 7, % $250,001 to $350, % 6,778 5, % 7,198 5, % $350,001 to $500, % 4,338 3, % 4,562 3, % $500,001 to $1,000, % 3,209 2, % 3,303 3, % $1,000,001 and above % % % All Prices 3,722 7, % 30,879 25, % 34,601 33, % of Inventory That Is % 55.0% 23.0% 39.4% 14.9% 28.3% 9.2% 18.7% 5.8% 11.7% 4.9% 8.9% 2.9% 5.3% 1.4% 1.8% 10.8% 21.7% of Inventory That Is 39.9% 55.0% 23.0% 39.4% 14.9% 28.3% 9.2% 18.7% 11.7% 8.9% 5.8% 4.9% 5.3% 2.9% % 1.8% There's a direct relationship between price range and lender-mediated activity. The more affordable the market segment, the more common foreclosures and short sales become. 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 and above Minneapolis Area Association of REALTORS. 2

3 Median Prices Traditional All Properties $174,500 $169,900 $154, % $235,000 $235,000 $227, % $235,000 $228,900 $207, % Single-Family Detached $182,000 $178,000 $160, % $255,000 $255,000 $245, % $251,950 $248,000 $220, % Townhomes* $157,000 $151,000 $140, % $192,763 $190,000 $180, % $191,900 $186,050 $170, % Condominiums $112,001 $93,000 $108, % $175,500 $172,500 $178, % $175,000 $169,900 $169, % *Includes twinhomes Median Sales Prices $235,000 $228,900 $207,000 Two- Year : -11.9% $174,500 $169,900 $154,000 Two- Year : -11.7% $235,000 $235,000 $227,000 Two- Year : -3.4% Traditional properties continue to depreciate at a slower rate than foreclosures and short sales. This is either a sign that buyers are willing to pay higher prices for traditional homes or an indication that traditional sellers face further declines ahead. Time will tell. Traditional Two-Year in Median Price by Property Type Traditional Condominiums Condominiums -2.7% +1.4% Condominiums appear to be holding the line on value better than other property types for now, though they are a relatively small share of the market. Traditional Single-Family Traditional Townhomes -6.6% -3.9% Property condition issues and aggressive downward bank pricing are bringing the values of lender-mediated properties down quickly. Townhomes -10.8% Single-Family -12.1% Minneapolis Area Association of REALTORS. 3

4 New Listings and Closed Sales Traditional of Market Activity That is New Listings 997 2,932 6, % 32,336 29,253 21, % 33,333 32,185 27, % 3.0% 9.1% 24.3% Closed Sales , % 14,550 11,431 8, % 15,000 12,399 11, % 3.0% 7.8% 25.8% of Market Activity That Is New Listings Closed Sales 3.0% 3.0% 9.1% 7.8% 24.3% 25.8% With an unfortunate influx of foreclosures and short sales alongside declines in traditional activity, it's no surprise that lendermediated activity now comprises roughly one quarter of listings and sales the Twin Cities market. New Listings 35,000 30,000 25,000 Traditional 20,000 15,000 10,000 5, ,000 15,000 Q Q Q Q1- - Q3- Q4- Q1- - Q3- Q4- Q1- - Closed Sales Traditional The traditional market is cyclical; the lendermediated market is not. Foreclosures and short sales don't adhere to the same seasonal upswings and downswings as the rest of the market. 10,000 5,000 0 Q Q Q Q1- - Q3- Q4- Q1- - Q3- Q4- Q1- - Minneapolis Area Association of REALTORS. 4

5 Appendix A: MLS Area Breakdown MLS Area July Inventory of Homes for Sale Q1 & Home Sales MPLS - Calhoun-Isles % % MPLS - Camden % % MPLS - Central % % MPLS - Longfellow % % MPLS - Nokomis % % MPLS - North % % MPLS - Northeast % % MPLS - Phillips % % MPLS - Powderhorn % % MPLS - Southwest % % MPLS - University % % Buffalo % % Wright County (Ext Buffalo) 1, % % Hutchinson % % Mcleod County % % Robbinsdale % % Crystal % % New Hope % % Brooklyn Center % % Brooklyn Park % % Maple Grove/Osseo % % Champlin % % Hennepin-North % % Hennepin-Northwest % % Sibley County % % Golden Valley % % Plymouth % % Richfield % % Bloomington-East % % Bloomington-West % % Lake Minnetonka % % Edina % % Hopkins % % Minnetonka % % Saint Louis Park % % Eden Prairie % % Carver County % % Chanhassen % % Chaska % % Victoria % % West St. Paul % % South St. Paul % % Mendota/Lilydale/Mendota Heights % % Sunfish Lake % % Inver Grove Heights % % Eagan % % Burnsville % % Apple Valley % % Rosemount % % Hastings % % Eastern Dakota County % % Farmington % % Lakeville % % Southern Dakota County % % Minneapolis Area Association of REALTORS. 5

6 Appendix A: MLS Area Breakdown MLS Area July Inventory of Homes for Sale Q1 & Home Sales Northfield % % Rice County % % Shakopee % % Prior Lake % % Savage % % Jordan % % New Prague/New Market/Elko % % Belle Plaine % % Le Sueur County % % Goodhue County % % Falcon Hghts/Lauderdale/Roseville % % Lino Lakes/Hugo/Centerville % % North Central Surburban % % Ham Lake % % White Bear Area % % Forest Lake Area % % Northeast Anoka County % % Southern Chisago County % % Maplewood/North St. Paul % % Bethel % % SP-Phalen % % SP-Hillcrest/Hazel Park/Dayton's Bluff % % SP-Southeast St. Paul % % Lakeland/Afton/Denmark % % Newport/St. Paul Park/Cottage Grove % % Pine Springs/Lake Elmo/Oakdale % % Woodbury % % Stillwater/Bayport % % SP-Riverview/Cherokee % % SP-Home Croft/W 7Th % % SP-Crocus Hill % % SP-Downtown/Capitol Heights % % SP-Central % % SP-Como % % SP-St. Anthony/Midway % % SP-Town & Country/Merriam Park % % SP-Mac/Groveland/River Road % % SP-Highland Area % % Big Lake Township % % Elk River % % Northwestern Anoka County % % Ramsey % % Andover % % Blaine % % Arden Hills/Shoreview % % Moundsview/New Brighton/St. Anthony % % Coon Rapids % % Fridley % % Anoka % % Hilltop/Columbia Heights % % Spring Lake Park % % Lexington/Circle Pines % % Sherburne County % % Isanti County % % Cambridge % % Minneapolis Area Association of REALTORS. 6

7 Appendix B: Municipality Breakdown City July Inventory of Homes for Sale Q1 & Home Sales Afton % % Albertville % % Albion Township % % Andover % % Annandale % % Anoka % % Apple Valley % % Arden Hills % % Baldwin Township % % Bayport % % Baytown Township % % Becker % % Becker Township % % Belle Plaine % % Bethel % % Big Lake % % Big Lake Township % % Birchwood Village % % Blaine % % Bloomington % % Blue Hill Township % % Brooklyn Center % % Brooklyn Park % % Buffalo % % Burns Township % % Burnsville % % Cannon Falls % % Carver % % Cedar Lake Township % % Center City % % Centerville % % Champlin % % Chanhassen % % Chaska % % Chatham Township % % Chisago City % % Chisago Lake Township % % Circle Pines % % Clear Lake % % Clearwater % % Cokato % % Cologne % % Columbia Heights % % Columbus % % Coon Rapids % % Corcoran % % Corinna Township % % Cottage Grove % % Credit River % % Credit River Township % % Crystal % % Dayton % % Deephaven % % Delano % % Minneapolis Area Association of REALTORS. 7

8 Appendix B: Municipality Breakdown City July Inventory of Homes for Sale Q1 & Home Sales Dellwood % % Denmark Township % % Dundas % % Eagan % % East Bethel % % Eden Prairie % % Edina % % Elk River % % Elko New Market % % Excelsior % % Falcon Heights % % Faribault % % Farmington % % Fish Lake Township % % Forest Lake % % Franconia Township % % Fridley % % Golden Valley % % Goodhue % % Grant % % Greenfield % % Greenwood % % Ham Lake % % Hampton % % Hanover % % Harris % % Hassan Township % % Hastings % % Haven Township % % Hopkins % % Howard Lake % % Hugo % % Independence % % Inver Grove Heights % % Jordan % % Kenyon % % Lake Elmo % % Lake St Croix Beach % % Lakeland % % Lakeville % % Lauderdale % % Lexington % % Lilydale % % Lindstrom % % Lino Lakes % % Linwood Township % % Little Canada % % Livonia Township % % Long Lake % % Lonsdale % % Loretto % % Mahtomedi % % Maple Grove % % Maple Lake % % Minneapolis Area Association of REALTORS. 8

9 Appendix B: Municipality Breakdown City July Inventory of Homes for Sale Q1 & Home Sales Maple Plain % % Maplewood % % Marine On St Croix % % May Township % % Mayer % % Medina % % Mendota Heights % % Minneapolis 3, % 2, % Minnetonka % % Minnetrista % % Monticello % % Monticello Township % % Montrose % % Morristown % % Mound % % Mounds View % % Nerstrand % % Nessel Township % % New Brighton % % New Hope % % New Market Township % % New Prague % % New Scandia Township % % Newport % % North Branch % % North Oaks % % North St Paul % % Northfield % % Norwood Young America % % Oak Grove % % Oak Park Heights % % Oakdale % % Orono % % Orrock Township % % Osseo % % Otsego % % Pine Island % % Plymouth % % Princeton % % Prior Lake % % Ramsey % % Randolph % % Red Wing % % Richfield % % Robbinsdale % % Rockford % % Rockford Township % % Rogers % % Rosemount % % Roseville % % Rush City % % Savage % % Scandia % % Shafer % % Minneapolis Area Association of REALTORS. 9

10 Appendix B: Municipality Breakdown City July Inventory of Homes for Sale Q1 & Home Sales Shakopee % % Shoreview % % Shorewood % % Silver Creek Township % % South Haven % % South St Paul % % Southside Township % % Spring Lake Park % % Spring Lake Township % % Spring Park % % St Anthony % % St Bonifacius % % St Cloud % % St Francis % % St Louis Park % % St Michael % % St Paul 2, % 1, % St Paul Park % % Stacy % % Stillwater % % Stillwater Township % % Sunfish Lake % % Sunrise Township % % Taylors Falls % % Tonka Bay % % Vadnais Heights % % Victoria % % Waconia % % Wanamingo % % Watertown % % Waverly % % Wayzata % % Webster % % Welch % % West Lakeland % % West Lakeland Township % % West St Paul % % White Bear Lake % % White Bear Township % % Willernie % % Woodbury % % Wyoming % % Wyoming Township % % Zimmerman % % Zumbrota % % Minneapolis Area Association of REALTORS. 10

11 Postscript: A Final Note on Methodology There is currently not a one-size-fits-all database definition of what a foreclosure or short sale is. As such, there is not yet a neatly organized data marker in the RMLS system which flags these properties. So, to identify which homes were lender-mediated and which were not, we searched through the subjective remarks that REALTORS employ when listing properties. Through extensive research as well as quality cross-checking with other data sources these 20 phrases were identified as commonly indicative of a foreclosure or short sale property in the RMLS system, including a few misspellings: Bank owned Short sale Bank approv Lender approv 3rd party approv Foreclosure Preforeclosure Forclosure Preforclosure Subject to bank Subject to 3rd Subject to lender Redemption Shortsale REO Hud acquire Subject to corp Corporate owned Corp owned Corp. owned With these terms as our guide, we were able to create an automated data procedure to separate properties which were flagged with these terms from those that were not, forming their foundation of our analysis. Therefore, it should be noted that this is not foreclosure data, nor should it be construed as such. Rather, this is simply a measurement of reported instances of terms commonly used to describe foreclosures and short sales in the RMLS system. RMLS has now created a data field called In Foreclosure/Bank Owned, but this field was not active during the second quarter of this year. Future reports will take this new field into consideration alongside the subjective remarks listed above. Minneapolis Area Association of REALTORS 11