Bank REO Properties Up in June
Last month, Minneapolis, Minnesota saw its home sales jumped by 33 percent. This is the 12th consecutive month that the city has experienced a rise in home sales. This data provided some hope on the languishing housing market, particularly that a large volume of sales last month were from bank REO properties.
But industry experts remained cautious, saying that the recovery of the housing market still depends on how soon the increase in the number of bank REO properties would be controlled. Last month, pending home sales rose by 33.7 percent to 5,183, compared with the same month figures of last year.
Last month’s increase in home sales was the highest since the June 2005 sales. It also marked the 12th straight month of home sales increase, according to the Minneapolis Area Association of Realtors.
Meanwhile, the number of homes for sale last month declined by 21.6 percent to 26, 204 compared with the same month numbers a year ago. According to the association, the fewer the property is on the market, the higher the prices of homes.
In Minneapolis, the housing market is showing some improvement, albeit slowly. In June, the number of closed sales rose by 20 percent. However, over 40 percent of sales closed last month were bank REO properties or short sales, these are deals in which lenders agree to sell a distressed property for less than the total mortgage owed by the homeowner.
But data showed that the number of sales involving foreclosed properties or short sales dropped from 59.7 percent during the first month of this year.
Wells Fargo and Co. senior economist and president Scott Anderson said that the decline in the volume of foreclosures and short sales in the total home sales in the city is a good development that may lead to a short-term recovery of property values.
However, industry experts are concerned that another flood of distressed properties due to the increasing unemployment rate and the unstable labor market is in the offing.
Statewide, foreclosure filings in the first quarter rose by 8 percent to 7,173 compared with the last quarter of 2008, and 70 percent higher than the same quarter a year ago. Furthermore, filings for bank REO properties in the state accounted for 1 percent only of the total 803,489 foreclosures nationwide in the first three months of this year.
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