Minneapolis/St Paul Duplex Sales Blow Up
Holy cow Batman! The banks are taking a beating!
This morning, MAAR released its weekly sales report for the week ending October 11. Get this: of all the pending home sales posted in the metro that week, 47.3 percent, or almost half of them, involved a lender-mediated foreclosure or short sale.
The good news? Pending sales blew up – logging a 21.1 percent increase over the same week last year.
But that’s nothing. Duplex and small multi-family housing sales for the same October period flat out exploded; rising a staggering 428.57 percent over the same week last year.
Aren’t we in a financial crisis? Wasn’t the stock market tumbling last week? Perhaps investors saw opportunities in real estate. They should have. The average sale price for a duplex during the first full week of October last year was $192,067. For the same time this year? It’s $95,649.
How many of those sales involved banks? In 2008 a full 93 percent of them. Last year’s equivalent week represented 85.7 percent lender-mediated transactions.
Isn’t there a lot of inventory on the market? Well, the number of single family properties that came on the market were down 11.5 percent over those that became available at the same time last year. New multi-family property listings, on the other hand, were down a full 20 percent year over year.
I can’t imagine prices at this time next year will drop by half again. Can they?