No money down and no payments until 2007. Some restrictions apply.
It sounds like a car ad, but this isn’t the tag line for a new convertible. Instead, it’s an offer for new, two- and three-bedroom condos at the Bryson at Woodland Park in Herndon. The deal also includes no closing costs.
The Bryson is not alone. Don’t miss "closeout prices" on condos at Legato Corner in Fairfax. "Save up to $50,000" on condos at Park Place in the Lorton Town Center. Get one year of free condo fees, $10,000 towards options and $5,000 towards closing costs in a "limited time" offer for condos at Cameron Station in Alexandria. In another "limited time offer," condos at Laurel Highlands in Lorton are being sold with one free year of condo fees and $7,500 towards closing costs.
SELLING A CONDO is clearly much more difficult than it used to be.
"We know it presents the greatest challenge right now in the real estate market," said Jill Landsman, director of communications and marketing for the Northern Virginia Association of Realtors. "I know a lot of Realtors are using secret weapons by putting in a lot of perks."
Up until the summer of last year, the condo market was red hot, which pushed expectations sky high. A condo was like a blue chip investment, attracting investors as well as homebuyers.
But with the sale of condos fueled by speculators during the previous five-year boom, it’s also been the niche market most severely hit by the cool down.
Nearly three times as many condos are on the market today compared to last year, according the Metropolitan Regional Information System, Inc. (MRIS).
Compounding the fierce competition caused by the increase in inventory, condo sales have slowed compared to previous years. Last month’s condo sales dropped 18 percent compared to last year, according to MRIS.
According to Lawrence Yun of the National Association of Realtors, the condo market is always more susceptible to purchases by investors and speculators. "Now these short-term investors have left the market," said Yun.
The senior economist said he would not be surprised to see zero growth in price over the next 12 months. "I would point out that the job market is still very strong, so there will be a need for housing."
In addition, Yun said the condo market may see a "boost" in price as developers cancel plans to build more condos or decide to convert plans for condos into rental units.
REALTORS EXPLAIN the slowdown in part by saying buyers have become more patient, spending much more time on comparison shopping.
"Last year, it was a seller’s market and condos were still moving," said Jennifer MacKenzie, an agent with Long & Foster in Arlington. But in today’s slower-paced market, she said sellers need to make their condos look like a bargain.
"If it appears to be a good deal, it’s going to sell," said MacKenzie, who has sold real estate for nearly three years. "The closing cost credit is definitely something we’ve been using a lot in the last six months — something we didn’t see last year."
One of MacKenzie’s condo listings in Arlington is selling for $325,000. The offer includes a $5,000 closing cost credit, but it’s for a limited time. "I’ve been using them with an expiration date, so it’s kind of like a coupon," said MacKenzie.
Amanda Wallingford, a Realtor with McEnearney Associates said that condos are still an attractive purchase. "They are a great way for people to gain entry into homeownership," said Wallingford, who thinks the market is still rife with buyers who are just being more cautious.
INCENTIVES CERTAINLY help attract buyers and help them assuage concerns, said Wallingford. "Some [buyers] don’t have the cash to close and for others it’s overcoming the condo fees," she said.
Wallingford has a co-listing for a condo that includes six months of free condo fees. "Having the condo fee paid for that period lessens the anxiety of paying a monthly mortgage," she said.
But the overwhelming problem in the market remains a disconnect between what sellers expect their homes to sell for and what the market will bear.
"Managing sellers’ expectations is one of our biggest challenges," said Wallingford.