The Low-End is HOT!

No "Extra Innings" -- Promise

Where: 38xx 37th Ave. South, in Minneapolis' Longfellow neighborhood

When: listed yesterday (Aug. 3)

What: 2 BR, 1 BA home built in 1914.

Who: listed by Kathleen Doyle, Edina Realty City Lakes

How much: $91,900

Want an indication of how intense Buyer activity is at the lower end of the Twin Cities housing market at the moment?

This modest, 1914 Longfellow home -- all of 2 Bedrooms and 912 square feet, asking $91,900 -- has already elicited multiple offers, in less than 24 hours on the market. Another 20-30 Buyers are planning to see it today.

The listing agent, Kathleen Doyle (612-802-9066), who's out of my office, is advising everyone that all offers are due by tomorrow (Wed.) at 5 p.m.

P.S.: And no, it's not a foreclosure -- it's an estate sale. If Kathleen's handling it, you'll get a prompt response, and if your offer is the best -- you'll actually get it, no games or "extra innings"! Imagine . . .

Spec Builders Play it Safe(r)

More Singles & Doubles, Fewer Home Runs

Baseball batters facing a strong pitcher and defense adjust by hitting for singles and doubles rather than home runs.

Similarly, in a tough economy, more builders and contractors appear to be adjusting by hitting economic "singles" and "doubles" rather than home runs.

So, instead of paying $400k-$600k for a lot (or tear-down), than putting up a $1.5M-$2M home, I'm seeing more instances of $80k-$140k lots being turned into $250k-$350k new homes.

Or, the same contractors are paying the bills by doing $100k-$250k major remodels.

No, the margins aren't as good, but it keeps crews busy (and intact). It also takes a lot less time to sell a $300k new home in a tough economy than a $2M home.

The Twin Cities neighborhoods that appear to be benefiting most from this "downshifting" trend have three things in common: 1) good location; 2) older, often under-sized housing stock; and 3) relatively modest prices

Where's that?

Neighborhoods such as Minneapolis' Longfellow and Seward neighborhoods, St. Louis Park's Birchwood neighborhood, and parts of Golden Valley and Hopkins.

Sold Price: Almost 5X(!) Over Ask

List Price: $17,900; Sold Price: $85,100

Sure, it was a mess. But this beat-up, bank-owned home was in a prime location -- just a couple blocks from the Mississippi, in Minneapolis' Longfellow neighborhood (the land alone had a tax assessed value of $44k).

So it wasn't surprising to see this home sell quickly.

However, even by the standards of recent South Minneapolis "foreclosure feeding frenzies," the selling price -- almost five times the asking price -- was still a shocker.

Want to guess how many offers came in on it?

Bonus (non-rhetorical) question: who was the seller?

Answer: Washington Mutual, one of the biggest peddlers of toxic loans before it blew up and was seized by the FDIC last September (what was left of its carcass was bought by JP Morgan Chase).

P.S.: in what is close to a record for turnaround time, the Buyer did a gut rehab and just re-listed the home for $239.9k.

Next Post: Foreclosure Bait and Switch