Do Statistics Lie???
We all believe that statistics give us a true overview of the marketplace. They can give us a broad understanding, but when we drill down there are stories that numbers don't address. Statistics chill the heat of the marketplace into cold numbers, pulling all emotion out of the process.
Minneapolis/St. Paul Market Update as of February 24, 2010
Over the last three months there were 7, 189 Purchase Agreements signed, and last year during the same period there were 7,186 PA's written. So, are conditions last year the same as this year? Not by a long shot.
Average days on market is down by -7.9%, 135 days.
Percentile of original price to sold is +1.3% to 92.8% of list price
Housing supply is 6.9 properties for every buyer, -28%.
Affordability index is +7.4% to 217.
We have to drill a lot deeper to find that 50% of the market for 2009 was dominated by bank mitigated properties, but those numbers dwindle as small inexpensive foreclosures are scooped as soon as they hit the market. Nowhere in those numbers do we have any idea how many offers were entered, but we do have the difference between list price and sold price. A multifamily property listed at $55K that sold for $100K skews the numbers of list to sale ratios. What do averages mean in a unique opportunity?
This year is a very different story than last. Minnesota is famous for our bitter winters, and last year there were few warriors plowing through snow banks, flashlights in hand, in searching bone chilling basements for investment opportunities. Winter of 2010 started early, first snows started in October and have been relentless. More aggressive warriors are out in force shoveling their path to foreclosure ownership before opportunity melts away.
First time buyers make up 51% of the market, and the median age has dropped from 32 to 28. They are all desperatley seeking the sweetheart deal and take advantage of the $8000 tax credit. Many find themselves beaten to the punch by investers with cash in deeper pockets.
Multiple offers on foreclosures are common. Buyers will ask, "How much lower do you think I can offer?"
Start with , "Ten thousand over list price, then be prepared for highest and best."
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