How much is my home worth? Twin Cities homeowners asking that question might find some encouraging news in a new residential real estate index that for the first time separates traditional, normal home sales from foreclosure and other distressed sales.
The Shenehon Center for Real Estate at the University of St. Thomas’ Opus College of Business released its first Minneapolis St. Paul Residential Real Estate Index. The monthly index uses nine data elements to measure the strength and health of the residential housing market in the 13-county metro market.
“The St. Thomas index is the first of its kind that we are aware of,” said Herb Tousley, director of real estate programs at St. Thomas. “In recent years we knew that the price had dropped for traditional, undistressed home sales, but we also felt that traditional-sale prices had not dropped as sharply as the Case-Shiller Index would seem to indicate.”
St. Thomas’ first report shows that if you own a home or are selling a home that is not distressed, the value has not been impacted as much as less-detailed market data might indicate.
The St. Thomas index was developed to provide a more detailed analysis of the Twin Cities residential real estate market than is available from the Standard and Poor’s Case-Shiller Home Price Index. Each monthly St. Thomas index for the Twin Cities will take about two weeks to calculate, allowing the information to be released about a month sooner than the Case-Shiller data.
The widely used Case-Shiller index uses data from repeat sales of single-family homes. It does not distinguish, however between a traditional, normal market sale and a distressed sale. Traditional sales are those unaffected by foreclosure or the threat of foreclosure.
St. Thomas’ monthly real estate report contains four composite index scores. In addition to an overall index based on all home sales in the Twin Cities, there are separate scores for traditional sales, foreclosure sales and short sales.
Research for the St. Thomas index was conducted by Tousley and Dr. Thomas Hamilton, associate professor of real estate at the university.