Lender-Mediated Sales Swallow the Market
[Note: the following dialogue, between local mortgage broker Alex Stenback and me, encapsulates a much bigger debate going on within real estate right now: how much do foreclosures and short sales “pull down” traditional sales?]
“When “lender mediations” are 60% of the market, it’s getting tougher to say “just ignore that other market” when it mostly IS the market.”
–Alex Stenback, “Behind the Mortgage” (2/11/09)
While you could certainly make the case that lender-mediated sales are metastasizing — even “blue chip” communities like Edina now have some foreclosures — from my (Realtor’s) perspective, it still seems that foreclosures have a pretty definite geographic concentration.
Obviously, once foreclosures surround you on a given block, it’s pretty hard to overlook them and instead grab a “traditional” sale miles away as a comp (believe it or not, that what the tax assessors do!). But that’s still the exception, not the rule, in most areas of the Twin Cities.
Bottom line: lumping foreclosures together with traditional sales is a “bruised apples to oranges” comparison.