Distressed home sales push down price data
Monday, October 24, 2011
Prices on distressed sales in the Twin Cities have fallen three times more than prices on traditional deals in the past few years, a report revealed Monday, underscoring the impact foreclosures and short sales have had on the local housing market.
Since 2005, the height of the housing price bubble, the median price of homes sold through traditional transactions fell 9.5 percent, according to the St. Thomas Residential Real Estate Price Report Index. Meanwhile, short sale prices declined 29 percent and foreclosure prices fell 38 percent.
The University of St. Thomas developed its index to get a better feel of the local market. National surveys such as the monthly Standard & Poor's Home Price Index don't break out data by sale type.
"Combining foreclosure and short sales of real estate with traditional property sales skews any single, composite price index, such as Case-Shiller's, and creates a downward bias when foreclosure sales and short sales represent a significant part of total housing sales," said Herb Tousley, director of real estate programs at St. Thomas.
Originally published: 10/24/2011, Star Tribune