The Market Bottoms . . in Fern Hill
The first hint of a bottom came around Thanksgiving, when this non-descript rambler in St. Louis Park's Fern Hill neighborhood came on the market for $189,900.
What happened next could only be described as a feeding frenzy: 17 offers in less than 72 hours, with the winning bid, $226,000, almost 20% over the asking price.
What were they fighting over? Most likely not the house -- a solid but rough, 1,800 FSF rambler -- but the .33 acre lot, itself assessed at $235,000 and located just six blocks west of Minneapolis' Cedar Lake.
Market Dynamics
What happened next was fairly predictable: the 16 losing bidders vowed to offer more aggressively next time.
So when a nearby home, 2641 Kipling, hit the market in February, the result was an even bigger frenzy ("Multiple Offers and $40k Over Asking Price"). The hold ultimately sold for more than 24% over asking price.
Two questions: 1) do you think the next Fern Hill foreclosure (assuming there is one) is going to attract more or less interest?; and 2) if the bottom of the neighborhood is being pushed up, does that spill over to more expensive, surrounding homes?
Answers: "more," and "yes."
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2 comments:
Ross,
Not to pop your bubble or anything, but methinks the Fern Hill rambler was wildly underpriced. I don't think it takes a real estate genius to figure out that an unremarkable house in that area, sitting on a one/third acre lot, is worth a hell of a lot more than $189K.
Charley S.
P.S. Call me about Desert Ventures
Clearly, one deal "does not a market make" (or something to that effect). That's why Realtors (and Appraisers) doing comp's ("comparable sold properties") use a minimum of 3 recent, similar sales, and toss out the outliers.
My "market call" on Fern Hill is actually based on first-hand knowledge of about 6-8 recent deals, most NOT foreclosures, that either went for higher, or went faster, than you would have expected. Or both.
Pricing is ultimately a subjective thing, and every home (and lot) is unique. However, as a Realtor who's handled at least a dozen deals near this home in the last few years, I can (and am) saying that pricing in and around Fern Hills is firming up . . .
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