Foreclosure Freeze Causes Minneapolis Duplex Squeeze

Anyone thinking the banks foreclosure freeze hasn’t had an impact on the availability of Minneapolis duplexes for sale, should consider the market data for the week ending November 5, 2011.

There were 12 new duplex listings that came on the market, and 18 duplex sellers already on the MLS who accepted purchase agreements.

During the same week last year, there were 16 duplex owners who received and signed purchase agreements for their properties.

However, there were also 45 new listings for duplex buyers to choose from.

Last year,  roughly one third of the new listings came from sellers who did not need to receive permission from a bank to sell.

This year, one half of the duplex sellers will be able to make selling solely their decision.

The presence of traditional sellers in the duplex market also meant a higher average off-market price increase to $144,364 over last year’s sold price of $116,602.

In my opinion, this is not necessarily cause for celebration. According to the Default Servicing News, estimates of the number of about to be repossessed and foreclosed properties yet to hit the market nationally run from 1.6-8.2 million.

Most industry analysts believe the most accurate figure of shadow inventory to be around 4 – 4.5 million homes.

The number of distressed properties currently on the market is somewhere in excess of 1 million.

It is important to bear these figures in mind when considering the single family home market in Minneapolis and St Paul as well. New listings for the week were down 18.7 percent, pending sales increased 20.5 percent, and overall, there are 22.1 percent fewer homes to choose from on the MLS than there were one year ago.

As winter approaches, it will be important to watch for signs of a Minneapolis bank owned duplex inventory thaw.