Chris Snowbeck on Price Reductions

Twin Cities Motivated Sellers

The Twin Cities ranked seventh among the 50 largest cities in the U.S. in terms of the share of reduced-price listings, with 34% of for-sale listings in the 13-county metro area [seeing] price reductions as of Sept. 1. The size of the average price reduction in the Twin Cities was 9 percent.

--Chris Snowbeck, "Twin Cities a Hotbed of Discounted Homes this Season"; Pioneer Press (9/12/09)

Snowbeck's article does a nice job summarizing the mindset of home sellers faced with discounting their asking price to get a deal. Locally, that anxiety definitely kicks up after Labor Day, as Sellers contemplate cooler weather, and the seasonal slow-down that comes with it.

That's particularly true for homes that have been on the market since Spring (or before!).

Snowbeck also quotes me, and cites the Minnetonka home I've been discussing the last week or so for its serial price reductions.

My take on price reductions is that, while they can show Seller motivation, they don't necessarily tell you if a home is well-priced ("Cheaper -- Not Necessarily Cheap"). That's because the initial asking price could have been inflated.

When it comes to establishing value, only three things matter: the comp's, the comp's, and the comp's.

Pioneer Press article

Local Reaction to Case-Shiller Numbers

Apparently, Case-Shiller's March statistics showing a 6% drop in Twin Cities house prices provoked a range of reaction, including some questioning its accuracy.

Chris Snowbeck's piece in the St. Paul Pioneer Press today, "Home Prices Dive -- With an Asterisk," does a nice job cataloguing the responses (including a quote from yours truly). According to Snowbeck, "reaction to the Case-Shiller numbers ranged from skepticism to indifference."

My take definitely places me on the "indifferent" end of that scale, for the reasons I mentioned on this blog yesterday . . .

Latest Case-Shiller Numbers

"Are the Case-Shiller Numbers Right?"

Chris Snowbeck at the St. Paul Pioneer Press is soliciting local Realtor and lender feedback to the latest Case-Shiller housing statistics. The (absymal) March numbers showed a record one-month fall of 6% in the Twin Cities.

Snowbeck's question to the "experts" (myself included): 'are the Case-Shiller numbers accurate?'

Here's what I emailed Snowbeck:

My main reaction is that a market-wide statistic simply isn't that useful, no matter how accurate it is. The Twin Cities housing market, to me, is at least 90 discrete sub markets; even Minneapolis has thirty-plus separate neighborhoods (and 11 separate areas for MLS purposes).

I don't doubt that the neighborhoods where foreclosures are running rampant -- Jordan and Folwell in Camden; Phillips; parts of Powderhorn -- are down much more than 6% in March. However, near Linden Hills, parts of Seward, and near Cedar Lake are doing fine.

The 6% is a blended number, that masks huge variances . . .

Watch for Snowbeck's article tomorrow(?) . . .