On Sale: Basswood Road

Chain-Reaction "For Sale" Signs

It's one of those anomalies that you see from time to time -- and that understandably gives Buyers pause: a block where every other house seems to be for sale.

At the moment, that phenomenon seems to characterize Basswood Road, a 3 block-long street just west of Cedar Lake that straddles France Ave. (all but the very east end is in St. Louis Park; the rest is in Minneapolis).

What's going on?

I see three factors at play:

One. The "clogged pipeline" effect.

Two of the four (soon to be 5!) houses on the market were originally listed more than 18 months ago.

Rather than reduce their prices incrementally when they failed to sell, the owners have been holding their ground, literally.

While that strategy can work in a rising market, in a falling or flat market it causes a home to be "marooned," overpriced and stagnant -- and gumming up the pipeline for more recent home sellers.

Two. Functional obsolescence.

Much of the housing stock in the area consists of ramblers built in the 1950's: sturdy and solid, to be sure, but now functionally obsolete in many cases.

That often means only one hall bath for all the Bedrooms (vs. a private Master Bath); a dated, too-small Kitchen; and small and too few Bedrooms.

As I've written before, while mortgages have never been cheaper, (major) remodeling dollars are especially scarce now.

Three. Generational turnover.

Several of the Sellers have been in the neighborhood for 25-plus years.

They're now empty nesters who need less space, don't want to do maintenance, and want to travel more.

In other words, it's just time for them to sell.

Having all bought around the same time, it's natural for them to now move on at the same time.

Sizing it All Up

So, what should Buyers make of all the homes for sale on Basswood now?

And should you ever steer clear when you see too many "For Sale" signs?

My answers: "not so much," and "yes, depending."

Certainly where the explanation is rampant foreclosures, Buyers are wise to stay away: foreclosures are like an undertow that pull down the value of all nearby homes.

Ditto for unalloyed negatives like new (or wider) nearby freeways, garbage incinerators, power stations and the like.

However, when other factors are at play (the case on Basswood), and the neighborhood is in a great location with good housing stock, such temporary "Seller gluts" can be great opportunities.

Now You See It . . Now You Don't

Where: 4241 Basswood Rd. (Fern Hill neighborhood in St. Louis Park)
Asking Price: $699,900
Sold Price: $670,000
Tax Value: $731,000
Key Stat's: 3 BR/3BA; 4,300 FSF
Market Time: one day (12/31/2008)

"The reason dolphins have a reputation for saving drowning swimmers is that you never hear from the ones they push out to sea."
--Anonymous

There's no question that the housing market is soft in many areas of the Twin Cities.

However, one of the reasons that it appears softer than it really is is that everyone knows about the homes that aren't selling: they've got conspicuous "For Sale" signs in front, attract a steady stream of slow-moving traffic (or not), and almost seem to project a certain forlorn quality as time passes . . . and passes.

By contrast, a home that sells fast barely makes a ripple. The immediate neighbors certainly know about it -- they know about everything -- but anyone just driving past probably doesn't.

"Stealth Sale"

A great example of a home that just came (and went) before the general public knew about it is 4241 Basswood.

The listing agent networked the home via email to other agents, which is how I found out about it. However, the next thing anyone knew, it appeared on MLS "sold."

No "For Sale" sign, no Sunday open, no Broker open (Tuesdays). Boom . . gone. Total market time: one day.

Such "stealth" sales are more common than you might expect, and underscore two things about today's market:

One. Newspaper editors' favorite saying, "if it bleeds, it leads," applies to the housing market, too. Bad news is loud, good news is quiet.

Two. If you are a Buyer and want first crack at a choice property, you'd better have a Realtor.

In my experience, the most desirable homes attract a crowd, in strong and weak markets alike. By the time the general public knows about them . . . it's already too late.