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Feb 12, 2007 7:39 pm US/Central
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Winds Changing In Local Condo Market
by Heather Brown
Burnsville, Minn. (WCCO) ―
Bargain hunters are finding great deals at one new condo development in Burnsville, Minn.
Prices at the 35-unit Uptown Landing were slashed between $50,000 and $100,000 this week after the property went into foreclosure.
Experts say it was probably due partly to slow condo sales.
Byrl Peterson and his wife looked at a two-bedroom place for $220,000, down from $269,000. It was the first condo they've visited.
"The price attracted me, combined with the location. I like Burnsville," he said, adding he'd still try to negotiate down another $15,000. "I'm always negotiable."
It may be a tough negotiation, according to realtor Casey Cambridge.
"We're selling these for less than they cost to build, so it's a once in a lifetime opportunity. It's not a trend that you're going to continue to see," he said.
All morning, Cambridge's phone never stopped ringing. Everyone wanted to learn more the condos' "unrealistic prices" in Burnsville's Heart of the City.
"We are seeing anybody from young professionals to single parents to active empty nesters," he said, "It's an excellent time to buy and a bad time to sell."
Realtor Jim Reiter is the past president of the St. Paul Association of Realtors. He believes this deal is rare and doesn't see this type of foreclosure as a trend.
"I think there will be more of them. I don't think there will be a
lot more of them," he said.
In the past few years, developers have built more condos than they can sell. Recently, some of those projects have been delayed or even cancelled.
"There's a significant amount of inventory so you might be able to negotiate on price," said Chris Galler, senior vice-president for the Minnesota Association of Realtors.
Most Realtors will tell you this real estate market isn't as bad as people think. In 2001, the rate of appreciation on a home was around 11 percent and has been falling ever since. Last year, it was between 1 and 1.5 percent.
Reiter believes that's about to change. He predicts an appreciation of 3 percent this year.
"Our market will pick up this year. I know there are a lot of people that say it won't, that it will stay even. We've had what we call 'the shift,'" he said, adding he believes a unit that sells for $200,000 today will sell for the same or more in two years.
"I couldn't imagine advising a buyer not to buy in today's market," he said. "If you're looking to buy, now is the time. You have an incredible amount of stock to pick through."
For the most part, Galler agreed. He said the opportunities are there right now.
"If you're waiting a few months to save $5,000, the interest rate could go up and you've lost your $5,000 right there," he said.
Both Realtors agreed buyers must now consider real estate as an investment for the future. The days of buying in January and selling in June are over.
No one should expect to make money on their purchase for at least three to eight years. Reiter recommends keeping a condo as an asset if you can swing it.
"I can rent that out. I can keep that condo for 10 years and hopefully it's paid for," he said.
And when it's a buyer's market, sellers have to be careful. Reiter told a story about a friend in Blaine. Three years ago, when the supply was high, he bought a townhome for close to $250,000. Now, it's worth about $40,000 less. That friend has been trying to sell for a year.
He stressed the most important thing is to realize what you're getting into when you a buy a house, condo or townhouse. Understand what may seem like a deal will be far from it if you can't pay your mortgage and ultimately have to foreclose on a home.
If you're interested in the Burnsville condos, there will
open houses all week from 11 a.m. to 2 p.m. and 5 p.m. to 7 p.m. at 150 East Burnsville Parkway. They'll be accepting purchasing agreements this Saturday.
(© MMVII, CBS Broadcasting Inc. All Rights Reserved.)