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.

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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