No Sub-$1m Listings in Trees

Posted by Dave Fratello on Monday, September 28th, 2009 at 4:12am.

For several months now, the number of options in the Tree Section below $1m has grown steadily.

For the moment, no more.

The least-pricey options on the open market in the Trees now are (click addresses for pics & details via Redfin):
  • 1900 Oak (4br/3ba, 2175 sq. ft.) a remodel that fetched $1.253m in Sept. 2005 and is now priced somewhat below ($1.099m);
  • 2508 Walnut (3br/2ba, 1725 sq. ft.), a cottage that needs work, just featured in our "Sunday Opens" ($1.099m); and
  • 750 27th (3br/2ba, 1550 sq. ft.), most likely a lot sale down the road ($1.199m).
There are temporary "holds" placed on 2 listings below $1m:
  • 742 Rosecrans (3br/1ba, 900 sq. ft., $695k) and
  • 1417 Walnut (3br/2ba, 1125 sq. ft., $899k).
In the past week, we've seen sales (new escrows) at 3609 Poinsettia (pictured) (3br/2ba, 1300 sq. ft., $779k) and 3109 Laurel (2br/2ba, 1025 sq. ft., $899k – and with a lot more story behind it than we have time for now).

Bumping up just a bit, 2613 Oak also just found a buyer – last at $1.199m, a price intended to unload this property, for which the outgoing owner paid $1.389m in March 2007. (The ravages of the Spring Rally of 2007.)

There are a few things going on here at once to reduce sub-$1m inventory. First, besides those "holds" on recent listings, we've seen 3 other sub-$1m offerings drop out recently. There's been a lot of dropping out these days as Fall takes hold.

Second, this is not a time of year for a lot of new listings. Dropouts may not be replaced for a while.

Next, most importantly, demand is active at the lower end – and has been for much of this year. We'll probably see more sub-$1m sales in the Trees in 2009 than we've seen since at some point between 2003-05. (A topic worth some research in early 2010.)

As many have noted, this active demand is largely without spec builder participation in the market, helping to keep prices down, and reviving the notion of "starter homes" for families intent on getting into MB. We're seeing plenty of remodeling crews and fewer bulldozers as a result.

At this point, either 1900 Oak or 2508 Walnut could drop below $1m for the right buyer – but then, why should they?
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