More Stats for Your Next Cocktail Party

by Alex Stenback on November 28, 2007

The previous post on foreclosures inspired some quick back-of-the notepad calculations to put the numbers into perspective.  In other words, how large a problem is this, relative to the broader real estate market?

According to the Minneapolis Area Association of Realtors, there have been 35,061 closed sales through October of this year.

According to a count performed by the Pioneer Press, there have been 10,521 homes foreclosed (sold at Sheriff’s Auction) through October of this year.

That’s 1 foreclosure for every 3 homes sold in the Twin Cities this year.  Trot that one out at your next cocktail party.

{ 3 comments… read them below or add one }

Duane November 28, 2007 at 5:25 pm

About 1/3 of the cocktail parties I attend are at homes that are being foreclosed, so I hate to bring this up!

Stephen Gross November 29, 2007 at 10:37 am

I’ve read a lot about how banks don’t know how to sell foreclosed property. Do you have any info on whether the foreclosed properties actually make up a significant percentage of closed sales?

Thanks,
–Steve

Editor/Alex November 29, 2007 at 11:19 am

That is a great question, and one that occured to us as well – just how many of these closed sales are bank-owned properties?

As far as I am aware, REO simply is recorded in the existing home sales figures. We’ll do some digging on this – somebody has to have some numbers on this.

Would also be interesting to know what percentage of closed sales are short sales (where the lender takes less than amount owed rather than going through the process of foreclosure.)

Either way, these REO sales will lag the actual foreclosures by 6-18 months depending on the length of the redemption period, and how long it takes the bank to actually sell the home, which is typically longer than normal market time.

One would think that the greater the percentage of closed sales that are bank-owned, the more downward pressure this would put on price. If true, that would imply that home prices have further to fall as these foreclosures make their way to the market.

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