I was reading the various newspaper feeds I have subscribed to and noticed an interesting article from the Pioneer Press. Apparently there is a condo development in Burnsville that has recently gone under due to inability to sell units. Uptown Landing in the new Heart of the City project was the first phase of a three phase development. Heart of the City is planned to be a downtown with a park, retail space, offices, performing arts center, and a hotel.
This is a prime example of “Just because you build it, doesn’t mean they will come”. Before I got married and started a family, I lived in downtown San Diego. My only option was to rent a condo because that was all there was. Condo living, anywhere, is mostly used for areas with little space to build out, so the only option is to build up. I understand the need for condo developments in downtown Minneapolis or St Paul, but in Burnsville? The largest condo is a two bedroom, 2000 sf unit for $325,000. Again, that price in Burnsville? (By the way, I live in Burnsville).
One of the hardest areas of real estate to sell right now is the condo market. It is happening nationwide and Minnesota is not immune. I believe in Miami, FL there are currently 70,000 vacant units for sale and 30,000 more are scheduled to hit the market in the next year upon completion. Needless to say owners and investors are realizing that buying by speculation comes with its risks…no buyers. Case in point, Uptown Landing, which had only sold 3 units out of 111 before it went into foreclosure. Yes, there might have been design flaws buyers did not like (two story units), but the fact is that condos do not do as great in the suburbs. Now the article in the Pioneer Press does state that another condo has been selling well in the area…in a year since completion, 31 of 91 units have been sold. To me, those numbers are still not that great.
No one should be surprised to see a developer go under. I am sure with the market stalling like it is, we could see a few more fail. When you speculate on the future, it can come back and bite you in the pocket book. If you think you might like to look into Uptown Landing, the bank has slashed prices up to $100,000 on each unit. The unit I mentioned above is now selling for around $229,000. Get them while they last as I am sure they will sell out by the weekend. Yeah, right.