Twin Cities Real Estate: Hardest Hit Areas of Twin Cities Metro Showing Improvement – Middle Class Suburbs Continue to Struggle
The Minneapolis Area Association of Realtors has published the latest sales data through April 2009. With four months of data, we have a pretty good read as to what’s happening in the Twin Cities real estate market. The trends seem pretty clear to me.
The areas that have been ravaged by foreclosures are showing dramatic improvement in sales activity. Yes, prices continue to remain lower by 25-35% compared to a year ago, but sales are jumping 35-55%.  It’s the closed transactions that is so important. Eventually prices will follow. Closed sales lead the way. Prices are a lagging indicator. While closed sales have been getting hammered since 2005/2006, they are showing great improvement in 2009 in the lower end of the housing market.
Cities that have been devasted by the foreclosure crisis are starting to rebound:
- Brooklyn Park – sales up 56%
- Robbinsdale – sales up 38%
- Crystal – sales up 8%
- Brooklyn Center - sales up 188% (yes, that’s one hundred eighty eight percent!)
- Richfied – sales up 12%
- Minneapolis – Camden – sales up 53%Â (MPLS North remains flat – sales are up only 1.9%)
Middle and upper middle class suburbs continue to see sales struggle:
- Plymouth – sales are down 22%
- Eden Prairie – sales are down 32%
- Edina - sales are down 11%
- West Bloomington – sales are down 6%
- Maple Grove – sales are down 4%
- Minnetonka – sales are UP 9%
With closed sales transactions down double digits and with more foreclosures coming to the suburbs, it’s difficult to see how home prices will improve in the near term.
What’s interesting to note is that your standard split level home in Plymouth that often sells for between $260,000 and $280,000 hasn’t really been affected much by the downturn the past four years. It’s not until you start getting above $400-$500k where you really start to see the impact of the collapse in the housing market.
It will take time to rebuild consumers’ confidence in the mid to upper bracket markets. That won’t happen overnight.
If you want to check out a very cool market research tool that Jeff Allen of the Minneapolis Area Association of Realtors and Aaron Dicknson of Edina Realty and fellow blogger created, check out the interactive web site for Twin Cities foreclosures and distressed sales. Great work gentlemen!
