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