The data has shown us if you price a townhome below $200,000 in a good
location they will sell. And that empty-nester products at higher price
points are struggling.
I have observed that the detached townhome product isn't selling well
anywhere. Maple Grove, Lino Lakes, Otsego, Blaine, Lakeville, Woodbury.
Locations that were doing well before the market crashed these detached
townhome products weren't selling. And as some of these communities are
again leaders in building permits these products are still struggling.
There are legal barriers to changing the product. In Maple Grove K Hovnanian
platted 300 lots for a detached empty-nester townhome product in Four
Seasons at Rush Creek. At a time when Maple Grove was bursting at the seams
with new homes K Hovnanian couldn't move this product. K Hovnanian made 3
unsuccessful appeals to the Maple Grove City Council to re engineer the
product and lift the 55+age restriction the developer had originally
requested. Now all they can do is radically strip down the home sizes and
amenities and radically lower the price. Even though the development is
located across the street from Rush Creek Golf Course and contains a 13,000
foot plush club house, tennis, putting green, plus indoor and outdoor pools.
A beautiful development. A home sold for $475,000 in February 2008. Two
years later a new construction home sold for $234,900
I can speculate on why the the detached townhomes don't sell. The general
weakness in the market at the upper end. The wrong floor plans. Or the
healthy empty nesters, once they make the decision they are done with the
single family home and yard, don't want a product that resembles it.
Otherwise they wouldn't move - which most don't because they don't have to.
If they do move they may have a second home in Florida or Arizona and they
want a product in Minnesota they feel comfortable leaving empty for the
winter. Perhaps they don't feel secure leaving a detached home unoccupied
for so long.
Whatever the reasons, this product is not selling well.
The product that seems to be selling well is a 2 story on a small single
family lot. Without association maintenance. Have detached townhome products
that aren't moving? You may want to contact your land use attorney and city
planner and see about changing your product to the 2 story and yanking them
or limiting their participation from the association.