Twin Cities Foreclosure & Short Sales Up in 2009
Mortgage foreclosures and short sales accounted for nearly half of all housing sales within the Twin Cities during 2009. They will likely continue to play a major role in the 13-county metro area’s housing activity in 2010.
According to the Minneapolis Area Association of Realtors, foreclosures and short sales to account for about 43% of all housing sales in the Twin Cities. Prior to 2006, foreclosures and short sales accounted for less than 5% of all home sales.
All that activity also had a major impact on the metro area’s median sales price and the area’s housing inventory. The Twin Cities closed out 2009 with a median home price of about $170,000, down from $195,000 in 2008. The Twin Cities median home price has been brought down by the high number of bank-owned homes sold and short sales.
Sales of homes less than $120,000 invreased 80% in 2009 compared with 2008. Homes that sold for between $120,000 and $150,000 incrased 40%. Sales of homes in the $150,000 to $190,000 range rose about 10%. Sales of all other home categories fell, with home at more than $1 million down about 30% in 2009 compared with 2008.
More foreclosures and short sales are expected this year, likely keeping the homes sales prices flat.
In response to the foreclosure crisis, Minneapolis and St. Paul have landed a combined $37.5 million in federal money aimed to slow down the foreclosure rate.
The city of Minneapolis received $19.46 million. The city was the lead applicant with Hennepin County and the city of Brooklyn Park. The city will ultimately divide the money with the county and Brooklyn Park.
St. Paul, on the other hand, was a stand-alone applicant and has been awarded $18.03 million by itself.
The money was part of $2 billion in awards to nearly 60 grantees announced by HUD earlier this month. The money is drawn from Neighborhood Stabilization Program funds from the U.S. Department of Housing and Urban Development. The federal stimulus money was authorized by the American Recovery and Reinvestment Act of 2009.
Hopefully the money spent on foreclosure prevention will produce an impact on the local foreclosure rate and the Twin Cities real estate market.