Vacation home and federal foreclosures are the ones still in high numbers in Minnesota, particularly in the northern part of the state.
Local housing analysts said that northern Minnesota is now approaching the 10-percent foreclosure rate for vacation homes nationwide, the highest reached in 5 years, based on data from the National Association of Realtors. They also contended that it is not only foreclosures that are slowing down sales of vacation homes and second homes, but also the decline in consumer confidence.
Some analysts said that it is not only sales of second homes that are declining, but also sales of big nonessential products. They said that the estimated drop of property values by 40 percent from 2007 levels have been forcing consumers to tighten their spending.
Although the percentage of foreclosed homes for sale in Minneapolis, MN now account for much less than the 43-percent share of foreclosure sales in the Twin Cities in 2009, the share of sales of federal foreclosures is now rising. As more mortgage loans are backed by FHA, Fannie Mae, Freddie Mac, VA, USDA and other government entities, more homes are getting added to listings of government-owned homes.
Based on data from a housing market analyst, there were almost 210,000 repossessed homes in the books of the FHA, Fannie and Freddie in the first quarter this year. As private banks increase their down payment and other lending requirements, more borrowers turn to government-guaranteed loans, hence increasing the possibilities for these government agencies to take back troubled properties.
For those interested in buying foreclosed houses for sale in northern Minnesota, there are now a lot of distressed waterfront homes in the region. Local realtors said that waterfront homes previously insulated from the crisis are now getting foreclosed.
They contended that the 9-percent increase in the statewide price median to $155,000 in April was one indication that the units being taken back by lenders were higher-priced Minnesota foreclosed homes, and since the share of homes guaranteed by government agencies has spiked, it is likely that a number of these are federal foreclosures.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.
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