TourPlanner
Register Here to create a personal TourPlanner that lets you save your favorite new homes, builders, remodelers and more.
Already Registered?
|
Press Releases
|
Your Home is Worth More than you May Think
9/8/2009
Headlines and national statistics don’t tell you the whole story. A recent study by the McComb Group, Ltd, a Minneapolis based real estate research firm, clearly shows that for most Twin Cities homeowners, the value of their residence has declined nowhere near as much as news stories would have you believe. In fact, discounting foreclosed and lender-mediated homes, the aggregate value of homes in the region has dropped less than seven percent since 2006, the height of the recent boom, and median sales prices of traditional homes have actually increased in 19 MLS areas.
There are two distinct home markets in the Twin Cities Metro area. “One of them, and by far the larger of the two, is the market representing ‘traditional’ homes, homes that are not in foreclosure, making up more than 90 percent of all of the homes in the two cities and their surrounding suburbs,” explained Jim McComb, owner of the McComb Group. “The other market, representing a mere nine percent of all homes in the metro, are those which are ‘lender mediated,’ either already in foreclosure or are threatened with foreclosure.
In the last year or two, non-traditional, i.e. foreclosed and lender-mediated sales, have reached 30-60 percent of all home sales. That’s why you’ve been reading about 25 and 30 percent home value declines. That is the result of compiling sales data, which includes all those foreclosed and lender-mediated sales, across the entire metro region to reach an across-the-board average. And while averages are a handy statistical tool, they may not be anywhere near accurate for individuals (consider how when Bill Gates enters a room, the average income figure would be in the millions).
Instead, you need to look at your immediate neighborhood, taking into account the home’s location, type and physical condition, the number of homes in the immediate area listed for sale, and the number of for-sale homes that are in foreclosure. That’s the only way you can discern your home’s real resale value.
“Our analysis uncovered the facts that the national home price surveys have largely failed to notice, “ McComb said. “Median sales prices of traditional homes—those not in foreclosure and not in danger of being foreclosed — declined at a much lower rate than the media would have you believe, and in 33 MLS areas the media sales price increased between fourth quarter 2008 and first quarter of 2009.
“The fact that lender mediated homes currently represent only nine percent of all homes but are a much larger proportion of closed sales is distorting the changes in home prices for traditional homes, understates the decline in sales prices of lender mediated homes, and overstates the decline in traditional home values,” he concluded.
back to press releases
|
|
|