Q3 2009 Market Update

Date Posted: Wednesday, October 21 2009 11:15 PM
 
The Minneapolis Area Association of Realtors (MAAR) reported in the first quarter foreclosure inventory was down by about 1,200 properties and down 2,100 properties in 2Q and when the third quarter numbers were released on the 15th of this month the numbers show the trend continues. Q3 lender mediated inventory is down 26.9% from last year at this time to 6,245 properties on the market. Foreclosed homes on the market are now only accounting for 7.9% of the inventory and short sales represent 17.4% of the inventory.
 
33,321 homes have closed through three quarters of 2009. This is an 11.7% increase over last year. 37.7% of these sales have been lender mediated transactions, a steep increase over the 3Q in 2008 of 30.5% and 2007 of 8.8%. On a positive note, we are a long ways from the peek of 60% in January of market dominated lender mediated sales. Overall through the 3Q lender mediated inventory is down 8.9% compared to Q3 2008.  Inventory is down 20.1% compared to last year and at the beginning of this month there were 24,687 listings available compared to 30,901 last year. This is a 23% drop in inventory.  This gives the market a 6.6 month supply as compared to 9.5 in 2008. Meaning it would take the current inventory about 7 months to sell out. Many would argue this is a positive trend. I however would not. The shrinking inventory isn’t matching up with the strong demand in the market right now and forcing many buyers into multiple offer situations. I have seen as many as 20 offers on a single home and as a result in my view the price of homes may being driven up artificially.  How much is the $8,000 first time home buyers tax credit driving the market right now? Much like last year prior to the DPA program Nehemiah ending there was a mad dash of buyers in the market and when the program ended so did the buying frenzy. Time will only tell what is in store for the fourth quarter of 2009.
 
The table below shows that the share of total inventory that is lender mediated has basically held steady as compared to 2008 at every price point.
 
 
 Lender mediated transactions continue to put downward pressure on median sale prices.
 
 
For listings as of October 1st Mendota/Lilydale/Mendota Heights comes in only at 6.7% for share of lender mediated inventory, while Brooklyn Center is at a Twin Cities high with nearly 60%. 
 
Top 5 Lowest Share of Lender Mediated Inventory
1.                              Mendota/Lilydale/Mendota Heights – 6.7%
2.                              St. Paul - Downtown – 9.5%
3.                              Edina – 10.3%
4.                              Mpls – Calhoun/Isles – 10.5%
5.                              Mpls - Southwest - 10.8%
Top 5 Highest Share of Lender Mediated Inventory
1.                              Brooklyn Center – 59.8%
2.                              St. Paul – Central – 58.1%
3.                              North Mpls – 57.0%
4.                              St. Paul – Hillcrest/Hazel Park/Dayton's Bluf – 55.9%
5.                              Brooklyn Park – 55.8%
 
Want to see how lender mediated transactions are affecting your neighborhood click here. Q3 2009 Update

Comments

Minneapolis Real Estate Market

Posted by minneapolis real estateOct 26, 2009 12:00 AM CDT 
Great market update! It is amazing to see how quickly alot of these homes under 250k here in Minneapolis are selling!! If things are priced right, buyer are snapping them up!! Thanks for sharing this market update.

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