That listing is a short sale, not an REO, that term is reserved for properties that are currently owned by the bank & have already gone through the forclosure process. There's no guarantee that the bank will acept even a full price offer on this great deal, as the offering price is less than what is owed on the mortgage. Be prepared to be patient & wait while the owner applies for the short sale with your contract to purchase, as the owner doesn't have the final say, the bank does.
Tom is right, this market has pushed prices back nearly a decade. As always, the condo market has taken the brunt of it. Word to the wise ... many complexes do not qualify for financing, due to the number of non-owners occupants, the number of abandoned units, as well as problems with the homeowners associations being in trouble, not having enough reserve funds.
So, unless you have cash, I would check into whether or not the complex is on the list of approved condos for financing & only look at those. Not a bad investment or a place you can live, less than rent in some cases!
Happy condo hunting!