Low-priced foreclosures and bankruptcy homes account for a large part of housing sales in the Twin Cities of Minnesota. This has resulted in price declines for February 2011 compared with the year before. Actual sales and pending purchases are also down from the same 2010 month.
Data provided by the Minneapolis Area Association of Realtors showed that pending home sales went down by 13% in February 2011 compared with year-ago levels to reach a total of 3,082. Meanwhile, closed sales of St. Paul and Minneapolis foreclosures for sale and non-foreclosed properties declined by 1.7% compared with February 2010. However, when compared with February 2009, sales were actually higher by 2.5% and also up from February 2008 by 5.6%. Median selling prices, on the other hand, dipped in February compared with one year ago.
The median rate for Minnesota foreclosures and non-foreclosed dwellings sold in the Twin Cities during the month was $143,000, down by 10% from February 2010. The percentage of total housing sales accounted for by foreclosed properties jumped by almost 40% in February of this year compared with year-ago levels. Housing market analysts stated that this is the reason for the drop in median prices. Selling prices dropped in almost all housing segments during the month when compared with 2010 levels.
Prices of bankruptcy homes and foreclosed houses dropped by 12.5% in February of this year compared with February 2010 to around $105,000. Meanwhile, median selling price for regular or non-foreclosed residential properties was at $194,605 in February of this year, down by 4% from one year ago. The price of houses sold through short sales went down by 3.2% from the previous year to reach a median of $140,290.
According to housing industry analysts, the continuous decline in home prices is mainly due to the oversupply of properties in free home foreclosure listings. Foreclosed properties are sold at very low prices, with most regular home sellers also forced to lower their asking rates to be able to compete with cheap distressed dwellings. Prices of residences are expected to continue to drop for the rest of 2011 as more foreclosures enter the market.
Most housing analysts predict further increases in foreclosed and bankruptcy homes this year, which will mean further depression in prices. They also believe that 2011 will be much the same as 2010 for the housing industry, with home sellers finding it difficult to unload their properties and most of them forced to lower asking prices just to close purchase transactions.
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