Agenda - Council Work Session - 11/24/2009

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FOR-SALE HOUSING MARKET CONDITIONS . Among the single-family projects, two developments have no homes priced below $235,000; another two projects have only 5% oftheir homes priced below $235,000. Estimates of the proportion were based on final prices for closed sales including upgrades. . Most of the developments have been marketing homes for several years. The oldest of those shown on the table is Hans Hagen's townhomes in The Lakes subdivision. Marketing since 2003, the 300-unit subdivision has 21 homes remaining for sale. Club West has had several components. The current addition is marketing a small number of townhome units in a prod- uct similar in design to a two-story design marketed in earlier years. Emery Village in Champlin has 208 townhomes and since 2006 has sold 150. They are under construction on a new four-unit building and have recently broken ground for a second four-unit building. Existing units at Parkside at Andover Station are being discounted to move them so that a new building can be started at the development. Prices are being discounted by about $25,000 to $30,000 off list price including upgrades on select units. . In some cases, base prices are definitely lower than originally marketed. Developers are mo- tivated to move units and are willing to negotiate on the base prices. If a model unit, there is usually a strong value in purchasing a model unit with substantial upgrades at a discounted pnce. · Nearly all developments have some "quick move-in" homes which are ready and available today. Delivery on homes under construction with some homes only 30 days from comple- tion and others 90 days from completion. Ifbuyers are ready to move, most can find product available within a short timeframe. Absorption of Multifamilv Developments Table F -8 lists the active multifamily developments in the Market Area and the number of sales closed in each of the past four years, 2006 through August 2009. · Three developments experienced an increase in closed sales activity in 2009. In general, sales activity decreased from 2006 through August 2009. · As shown onthe table, a few developments experienced an increase in activity in 2008 even as the market continued its decline. · Pricing of homes is down from their previous highs in 2005 and 2006, but there is some mar- ket activity with qualified buyers taking advantage of the drop in prices to purchase at a good value. MAXFIELD RESEARCH INC.