Resale Value of Eagan TownHomes (Apple Valley, St. Louis Park: for sale, credit, loan)

[mask2007]

Hi All,

We are looking at pre owned townhomes in the south Metro around Eagan. I saw lot of newer communities coming up in the Rosemount area but not in the Eagan area. I need to think about the resale factor when I plan to sell this house in another 5-6 years.

Is it true that resale of a townhome which is around 12 years old or more is challenging? I understand that it may be difficult in areas like Shakopee, Rosemount, or Apple Valley where a townhome of 12 years needs to compete with the lot of newer townhomes, but is that true in Eagan?

Does anyone know about the property appreciation in Eagan townhomes which are priced around mid-upper 200s? Also, does anyone have any experience with Wensmann Builders?

Thanks in advance and looking forward to your inputs.

[Robert P Stewart]

Is the sale of an older pre-owned townhome difficult? Yes.

I sell probably 2-3 townhomes every month. I've been in literally thousands of townhomes over the years and showed townhomes to hundreds of clients. Yes, selling a townhome can be more difficult.

But its getting better. Many of the big box townhome builders are slowing down. I've noticed less new inventory on the market than in years past. I suppose creditors are holding the builder's feet to the fire.

As of 30 seconds ago, there was 115 townhomes for sale in Eagan. Only 23 of those were built in the last 5 years.

In Rosemount, there's currently 59 townhomes for sale, with 38 of those built within the last 5 years. Rosemount's numbers do not take into account those new developments whose new homes are not listed in the MLS.

When I work with buyers who are purchasing a townhome, there are 10 different factors that I look at to determine if the purchase will be sellable in 5 years. Of course, all homes are sellable for the right price, but certain townhomes tend to appreciate while others do not. It comes down to the quality of the build, the location, the orientiation, market forces, shifting demographics, and several other factors.

The townhouse craze really peaked about 5 years ago - when a TON of townhomes were sold. We are now seeing that particular buying group leaving their townhomes for bigger single family homes. There's a surplus on the market, for sure.

There are buyers who want townhomes (like yourselves). And I work with lots of these people. When I walk into a townhome with them, I'm not looking at the townhome (I know what it looks like because I preview most properties) - I'm watching their faces. I watch what they pay attention to, the comments they make (both verbal and nonverbal), and even how they walk through the house. With that knowledge in mind, I help clients pick townhomes that are going to be most attractive to others (i.e. the ones with good resale potential).

Good luck in your purchase. Five years from now, I personally predict that the townhome market will be about the same, owing to the new housing developments that I've seen on paper (due out over the next 2-5 years). Buying the right townhome in the right way is critical. Selling the townhome the right way is critical. Just make sure your beginnings and endings are maximized!

All the best,

Robert

[mask2007]

Hi Robert,

Thanks a lot for your reply. It definitely made sense.

I am a first time homebuyer and am considering buying a townhome in a good location in Eagan off highway 55. My only concern is if i can sell it after 4-5 yrs since it will be almost 12 yrs old by then.. I have also read somewhere else that if the location is good, then the townhome will sell even if it is 12 yrs old and is well kept. If this is true, what accounts to a good location? Is it proximity to freeways, good school dist, proximity to shops, proximity to good walking trails and lakes?? (Or any other factors ???)

I was also told that in another 6 odd years, the baby bloomers may want to settle down in the TownHomes and that might contribute to a good resale of townhomes. But I am not sure if having other newer communities in the neighborhood would counter balance this factor? There are not many new ones in Eagan but Rosemount does have many. Rosemount does not work out for us since it may be too far a drive for me.

What are your thoughts.
Thanks again

[Lindenin]

I'm not a realtor, but I am pretty tuned in with the Twin Cities area. It is impossible to predict where townhome prices will be in 5 years, but I think you got some good advice from Robert. I also think that as long as the townhome is 1) in a convenient location, 2) in a generally well-kept development, and 3) has the basic features that a buyer would be looking for, then it should do fine on the market. At that point, it is all subject to the whims of the market.

Doing much more than that, to me, is speculating. I could speculate that the revival of Excelsior & Grand will have a spillover effect into all of St. Louis Park, creating nice appreciation for adjacent townhomes.... but I might be wrong. Maybe the spillover effect all occured two years ago. I could also speculate that the Northstar Commuter Rail will increase property values in Elk River or Big Lake, but again, all speculation.

My advice: Buy a place you like and feel good about. If you, as a buyer, are turned on by the places, chances are a buyer in 5-6 years down the road will be as well.

As for age, I wouldn't put so much stock in it. As long as you do a reasonable job of updating things with the new styles (which shouldn't change too much in 5 years), you'll be fine.

[TimtheGuy]

As Robert states "Just make sure your beginnings and endings are maximized!"

One peice of this puzzle is your financing. Did you know that Dakota County has an EXCELLENT 1st time homebuyer program? There is an income restriction (cannot make more than $77,600/year for 1-2 person household and $85,360 for 3 or more) and an aquistion limit (must purchase a property for less than $259,050).

The program offers below market 30 year fixed interest rates and a true grant (never to be repaid) equal to 4% of the loan amount. You can put as little as $0 down. You will not find a better program out there.

Let me know if you have any other questions.