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From the StarTribune.com: While many established Wright County neighborhoods have avoided the worst of the housing market collapse, the county ranks as one of the state’s worst areas hit by foreclosures. Pockets of this county, about 30 miles northwest of the Twin Cities, have seen home prices fall 30 percent or more in the past year.
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Creameries to communities
In St. Michael, the largest city in Wright County, almost 1,600 single-family houses, townhouses and condominiums were built between 2002 and 2007. The county’s average sale price jumped from $180,102 in 2001 to $234,009 in 2007, an increase of 30 percent. “In 2005, my dog could have sold real estate in Wright County,” Frie said. Subprime mortgages, which charge higher rates to riskier borrowers, proved especially popular. In Wright County, the percentage of homes purchased with subprime mortgages doubled from 13 percent in 2004 to 26 percent in 2006 — two and a half times the rate in Minnesota as a whole.
“A lot of people out here feel trapped,” said Dave Petersen, an agent with Keller Williams in Elk River, who has sold numerous houses in Otsego and St. Michael. “They were enticed by easy credit to buy houses that were never worth what they thought they were worth.”
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Ghost town subdivisions
A real estate agent urged the couple to buy early, noting that other buyers would bid up prices by 5 to 10 percent once the rest of the project became reality. The couple were shown idealistic renderings of the project that featured narrow streets and small storefronts mixed in with housing and offices.
“They sold the vision as much as the house,” James said. Builders began pulling out of the project two summers ago, after the housing market collapsed. There are several ghost town subdivisions like the Town Center of St. Michael across Wright County.
In Otsego there are 138 vacant houses. In Otsego Preserve, a new housing project just a mile north of Interstate 94 in Otsego, more than half of 128 houses are vacant, according to city officials.
Some homes are priced for $80,000 to $100,000 less than their original price.
“A lot of the prices that people were paying for property in Wright County had no basis in reality,” said George Schmidt, a real estate agent with Remax in Anoka. The 30 houses that were built are now on the market for as low as $200,000 — about half the original asking price.
Jeffrey Schoenwetter, chief executive of JMS Homes in Eden Prairie and one of the investors in Martin Farms, said 400 houses didn’t seem excessive when the project was hatched in 2004. Added Schoenwetter: “Builders were part of the problem. As recently as last year, after the housing market had already shown signs of weakness, developers were throwing six-figure parties to market their projects.
Karnes said of some of the county’s overdeveloped communities. In a sign of just how depressed the housing market is in Wright County, almost no one shows up for the sheriff’s auction of foreclosed homes held each morning in a tiny room with faded carpets in the Wright County courthouse in downtown Buffalo.
In the past four months, 86 percent of the homes sold in Wright County were bank-owned and 7 percent were “short sales,” or deals that were negotiated by homeowners who owed more than the house was worth, according to calculations by Frie.
And those cut-rate deals are undercutting values of houses throughout the county. The Colvins have considered selling their house to avoid a foreclosure. The Colvins say they were lured to buy their home, in a newer subdivision in Albertville called Heuring Meadows, by a mortgage broker with First Priority Mortgage in St. Michael. In St. Michael, the largest city in Wright County, almost 1,600 single-family houses, townhouses and condominiums were built between 2002 and 2007. “In 2005, my dog could have sold real estate in Wright County,” Frie said.
Ghost town subdivisions
A real estate agent urged the couple to buy early, noting that other buyers would bid up prices by 5 to 10 percent once the rest of the project became reality. Builders began pulling out of the project two summers ago, after the housing market collapsed. In Otsego there are 138 vacant houses. In Otsego Preserve, a new housing project just a mile north of Interstate 94 in Otsego, more than half of 128 houses are vacant, according to city officials.
Some homes are priced for $80,000 to $100,000 less than their original price.
In the past four months, 86 percent of the homes sold in Wright County were bank-owned and 7 percent were “short sales,” or deals that were negotiated by homeowners who owed more than the house was worth, according to calculations by Frie.
And those cut-rate deals are undercutting values of houses throughout the county. The Colvins have considered selling their house to avoid a foreclosure. The Colvins say they were lured to buy their home, in a newer subdivision in Albertville called Heuring Meadows, by a mortgage broker with First Priority Mortgage in St. Michael.
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