Sweeter home sales and prices, in Minn. and across U.S.

  • Article by: JIM BUCHTA , Star Tribune
  • Updated: May 22, 2012 - 9:40 PM

Last month the percentage of Twin Cities area distressed sales was the lowest in 17 months.

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swmnguyMay. 23, 12 8:48 AM

I'd glad to hear that some sellers are getting better prices. But let's remember that the unencumbered seller to qualified buyer market has never been the problem. It's all the bank-owned properties. As a homeowner, I have a stake in this, and I've been reading a lot about this issue. Realtor always say, as June Wiener says with no apparent awareness of irony, "There are lots of indications that now is the time to buy." The truth is, depending on whom you believe, there are somewhere between 4,000,000 and 11,000,000 foreclosed, vacant, bank-owned properties in the US sitting in the so-called "shadow inventory." Recently a survey in part of Phoenix found some 6,000 bank-owned vacant properties, but only about 250 of them listed for sale. The banks are holding inventory off the market, to create an artificial scarcity and drive prices up. Meanwhile they are selling as many of their non-performing mortgages as possible to the Federal Government at full price. The bailout continues. This might have the side-effect of helping some sellers right now, but it's just kicking the can down the road. The full truth is still that housing has a long way to fall. The median price of a house is usually 2.5x the median household income. That puts it around $125,000. Prices will decline past that point, and then regain stability at that point. We're nowhere near that yet. If you see a deal you like, go ahead, but most people who buy a house are paying at least 25% more than the house will be worth when they want to sell.

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