Home on a Diet

Inflated FSF: 'Told You So'

Where: 29xx Quentin Ave. South, in St. Louis Park's Fern Hill neighborhood

What: 3 BR/3BA Cape Cod built in 1936

How much: asking $349.9k

When: (re-)listed Mon. (Aug. 3)

You've probably heard of home expansions. But have you ever heard of home contractions?

This one did.

When the home pictured above first came on the market more than a year ago, it was billed as 3,937 FSF. After showing the home, I opined that that was dramatically high ("Too Good To Be True"; 7/26/2008).

Well, I was was right.

After six months on the market, the listing expired in January.

Then, yesterday, it re-appeared.

New Realtor. New asking price ($349,900). And, drum roll . . . new FSF: 2,754 -- or 30%(!) less.

TARP as Ultimate Sting?

TARP Mystery . . . Solved!

OK, it's taken me almost a year to puzzle out, but I think I've finally got it:

Superficially, the hundreds of billions in TARP money handed over to the financial sector's worst actors only looks like a stupendous reward for failure -- and not a little like ransom money, paid to keep the rest of the economy from cratering.

Ah, but that's only appearances.

What the TARP money really is . . . shhh! . . . is a super-sophisticated government sting, brilliantly designed to smoke out and then nab society's greediest and sneakiest operators.

Follow the Money

Think of the TARP money as bait.

Sort of like what banks do when they put invisible dye on cash in tellers' drawers, so that they can catch robbers red-handed after-the-fact (actually, blue-handed). Or, if you want a more graphic (but apt) analogy, like the dye you ingest as part of a colonoscopy.

Once the plan is put in motion, you wait, and watch; then, as the malefactors convert the cash to their own, private benefit . . . you pounce! You confiscate the ill-gotten plunder, return it to its rightful owners (taxpayers), and apprehend the perpetrators.

Memo to government "handlers": any time now, guys . . .

P.S.: of course, even if all this were true, you'd expect Wall Street to beat the charges. Their likely defense? Entrapment. (EnTARPment?)

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 . . .

The Scoop on the 'Loop (Calhoun)

Shadow Inventory . . . in the Same Building

There's been much talk of "shadow inventory" that wanna-be Sellers are poised to put on the market once conditions strengthen.

We're about to find out, because there are increasing signs that the lower end of the market is stabilizing, if not rising.

In the meantime, the Loop Calhoun, a 124 unit condo-and-townhome development just northwest of Minneapolis' Lake Calhoun, is making what might be called a market "re-debut."

Out of Bankruptcy

Tied up in bankruptcy the last 18 months or so, the owner, M&I Bank, is rolling out the first batch of ten units for sale.

I just took some clients through, and was very impressed: solid building, nice design, high end finishes, etc. And that's on top of a great location.

I was also surprised by the state of completion. I'd heard varying stories about work being stopped abruptly, but the three units I toured (one townhouse and 2 condo's) were easily more than 95% complete.

The two wild cards -- and they're big ones -- are: 1) the soft condo market, especially in the upper price brackets; and 2) the overhang of supply elsewhere in the building.

In that vein . . . once the first 10 units are under contract, another 55 will ultimately be made available for sale. (The balance were purchased pre-bankruptcy.)

Early Deals?

In fact, new construction always faces this problem of shadow inventory.

To surmount it, developers (and banks who take title in bankruptcy) typically dangle lots of carrots (read: attractive pricing) to entice the first wave of Buyers and generate sales momentum.

Once supply shrinks, the pricing on subsequent units firms up and the incentives go away.

Will that happen at Calhoun Loop?

Stay tuned.