In Northeast Minneapolis, the “rat” of distressed property seems to be working its way through the “python” of single family home sales, as we see proportionally more traditional sellers on market and closing deals compared to last year, to date.
Columbia Heights is behind, with traditional sales outweighing the distressed in both 2011 and 2012 (first eight months), but current listings showing traditional sellers in short supply (45 traditional to 43 distressed). Tiny St. Anthony, with 67 properties changing hands in 2011 and 62 in 2012, saw 12 distressed properties change hands in 2011 and 15 so far in 2012 but now it’s down to the single digits; three active and three pending that are listed as distressed.
Of the small amount of rental property changing hands (active or pending sale), 43 percent is distressed, mostly short sales.
“Distressed” means houses sold by lenders who foreclosed, or by owners who did “short sales” where their lender approved selling for less than what was owed on the mortgage. Some were in advanced stages of foreclosure.
With the new Neighborhood LIFT incentive funds (see separate article) making it possible for buyers to get up to $15,000 toward a home purchase in Minneapolis or Saint Paul, the Northeaster took a snapshot of the market to date (Aug. 31) in 2012 and compared with the first eight months of 2011. We’ll make a similar comparison when the bulk of the Neighborhood LIFT program is done.
In the current market, by the way, there are 128 single-family homes and 28 multi-family dwellings for sale according to the Regional Multiple Listing Service in the Northeast Minneapolis neighborhoods: Columbia Park, Waite Park, Marshall Terrace, Audubon Park, Bottineau, Holland, Windom Park, Sheridan, Logan Park, Northeast Park, St. Anthony East, St. Anthony West, and Beltrami. Of those, 86 single family homes and 14 multi-family are traditional sales. Distressed: 42 single family and 14 multi-family.
There are no multi-family properties currently listed in Columbia Heights or St. Anthony.
Looking at pending sales, the 44 traditional sales in Northeast far outweigh the nine distressed. The suburban pendings, eight traditional versus three distressed in St. Anthony, 13 traditional versus 24 distressed in Columbia Heights, tell a different story.
Comparing the first eight months of 2012 with the same period in 2011, sales in Northeast in a wide middle range from $106,000 to $209,000 were about the same, in both years skewed to the $106,000-155,000 end of the range but 2012 showing improvement in the $156,000 to $209,000 end.
The dramatic differences are in the lower and higher ends. In 2011, 116 properties in Northeast Minneapolis sold for less than $105,000; in 2012 it was 93. In 2011, only 13 properties sold for more than $210,000; in 2012 it’s 45 for the same eight-month period.
It’s safe to say that more sellers of homes with perceived higher values have entered the market and found buyers, than in the previous year.
It’s commonly assumed that most distressed properties are in the lower price ranges. In 2011’s first eight months, 65 percent of those 115 properties priced below $105,000 in Northeast were distressed, and in 2012 the percentage dropped to 60. In the lower end of the middle range, the percentage of distressed property selling for $106,000 to $155,000 was 29 in 2011 and 20 in 2012. Again, the rat moving through the python.
How does the housing market fare in Northeast Minneapolis in the last four months of the year? Well, last year 133 single family homes sold from September through December; in 2010 there were 110, and slightly more of those properties were traditional sales (71 percent) than we saw in 2011 (66 percent), and about equal to the proportions we see active now.
Disclosures: Data found on the Regional Multiple Listing Service. Margo Ashmore is a licensed real estate broker. Figures do not reflect seller contributions for closing costs or the portions of loans used to renovate homes; therefore the actual seller proceeds may be lower than the sold prices stated in the article.