Downsizing Developers: 'Stayin' Alive'

Dave Alan Homes in Minneapolis'

Bryn Mawr Neighborhood

Feel the city breakin'
And ev'rybody shakin'
And we're stayin' alive, stayin' alive.
Ah, ha, ha, ha,
Stayin' alive.
Stayin' alive.
Ah, ha, ha, ha,
Stayin' alive.

--lyrics, "Staying Alive" (The Bee Gees)

How does a local home builder weather an epic downturn in new construction amid a glut of upper bracket homes?

By going down-market (relatively speaking, at least).

New Math

In this case, Dave Alan Homes appears to focusing more on mid-tier neighborhoods like Byrn Mawr in Minneapolis, rather than upper bracket spots closer to the lakes or in Edina.

So, instead of buying tear-down homes for $300k-$350k and putting up $1.2M new construction in their place, builders are plunking down $150k or so and building $500k-$600k homes.

In fact, $150k is exactly what the buyer paid for 4xx Thomas Ave. South in February (market time: 1 day).

Judging by the state of construction I saw when I drove by this morning, the home is still about 3 months away from completion (note: the home pictured above is another, similar-looking Dave Alan home, not the one on Thomas).

P.S.: Since it's not on MLS, it's possible that this home is being built for a client (rather than as a "spec home").