Hearts in Hawai'i

The Move--Sep. 30
9/30/2010

There are a few lingering concerns which I have. First is, what if Messina won't budge on their initial asking price. While every shred of evidence points to the need to be somewhat flexible, how flexible is this, anyway? 1%? 5%? 10%? In our favor is the current state of the market in Duluth, which is poor. On the other hand, the poor market (from a sellers standpoint) has not led to an appreciable downward trend of prices in this city. People are either content to wait out the downturn (however long that may be), or they are simply dense. I understand this, to a degree. The idea of getting less for a property than what I paid for it two or five or ten years ago would repulse me as well. But the reality of the market is what it is--people aren't buying in Duluth. The number of properties sold has sunk to levels not seen in years if not decades.

On the other hand, taking into consideration similar properties in this area, there isn't much to compare this property to. There isn't much history in the general area and price range. In fact, the only real recent history is contained in the building just built (where our potential home is) and the building west of us on Waterview Drive, built in 2007. The lowest Messina has gone was only $5 thousand less than their initial asking price. What are the chances they will go lower than that for us? How helpful will Mark (our agent) be in this endeavor or is he butting his head against the same reality we are? Do we stick to a lower price than what they've sold other comparable units for in the hopes they "feel the pressure" to sell, or do we risk someone else swooping in and grabbing what we consider to be an extremely nice townhouse?

The real question, the only question which matters to us, is this--what is this property worth to us?

Meantime, Mark set up a viewing for us at another unit up at Aspenwood, in the Kenwood neighborhood of Duluth. Comparing that unit to the unit at Waterview, we come to a quick conclusion that Waterview is a much better place for the money. While Waterview is priced $25 thousand higher, the monthly association fees of $437 at Aspenwood (compared to $150 at Waterview), combined with property taxes being nearly twice as high at Aspenwood, mean we would be paying roughly $300 more per month, taking all costs into consideration. This simple wasn't acceptable to us. If not for Waterview, we would have given Aspenwood more serious consideration. On the other hand, those monthly association fees are a killer! In our mind, it is not worth it for a property which is roughly 50 years old.

After hashing it out over the evening (knowing full well what we really wanted), we were prepared to make our initial offer to Messina and begin the negotiation process.


Next: 10/1/2010--The Move--Oct. 1

Previous: 9/22/2010--The Move--Sep. 22

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