Some Twin Cities homeowners buying back their neighborhoods

  • Article by: KARA McGUIRE , Star Tribune
  • Updated: April 30, 2010 - 9:27 AM

Concerned about home values and safety, some neighbors aren't waiting for the housing market to recover. They're buying up the houses themselves.

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rockstarr41Apr. 29, 10 8:08 PM

by buying them at the amount he is buying at. I understand he doesn't want bad neighbors but he is doing as much value damage/value stripping as a potential investor would who can make the numbers work at a higher amount. Great investment deal potential but he is sapping the values out by low balling the homes in the neighborhood - essentially bringing them back to mid 1970's values. It's a slippery slope...the logic starts to work against you, it may take DECADES to bring it back up based on this philosophy and based off of sold value comps. 10 to 1 odds he may eventually own enough, perhaps even Section 8 some of them and eventually move up and out.

dtlundApr. 29, 10 8:20 PM

If the sellers could get more money, they wouldn't sell to Mr. Connoy. By simple economics, he's the highest bidder. In fact, if he wasn't there, the houses would sell to the next-highest bidder (if at all). Mr. Connoy is improving the neighborhood by investing in run-down houses and, therfore, improving everyone's property values. Any eyesore with an asking price of $100k is a much greater drain on a neighborhood than a refurbished house that previously sold for $30k.

kingcoleyApr. 29, 10 8:40 PM

You have no idea what your talking about. Nuff said.

swmnguyApr. 29, 10 8:49 PM

There's a house on my block I'm seriously considering purchasing myself. It's still way overpriced though. Rockstarr41 makes a good point but I think dtlund is correct in the end.

I think Mr. Connoy's purchase might show up low on comps for other sales in the neighborhood, but the price is so low it would be obvious as an outlier. In the long run having the house purchased, owned and maintained would be much better for the neighborhood than any kind of hit to comp sales.

Besides, if the prices go back to mid-1970's levels, well, maybe Mr. Market is telling us something?

chunstigerApr. 29, 10 8:50 PM

The banks are holding 9 years of inventory... 9 YEARS!!!!! Unfortunately, the only place this market is going is DOWN.

plathedApr. 29, 10 9:26 PM

Where did you come up with your comment? That is unbelieveable.

SupervonApr. 29, 10 9:33 PM

You could have government buying the house and moving in REAL trash next door. Or, is that what YOU really want?

bluedognorthApr. 29, 10 9:41 PM

Gives you some tax writeoffs and maybe some equity but man what a headache. In this case the neighbors are buying because they are attempting to sustain the neighborhood. "Rockstarr 41" has some valid points. If 20 out of 100 homes sells for 20% less than true market value. Pretty soon true market value "whole neighborhood" falls by 20%. But really 20 empty foreclosed homes pretty much lowers a areas value just by there nature. Better Scenario might be forming a neighborhood LLC like a HOA, buying the homes. That way everone has some "skin" in the game and a vested interest in the outcome.

glamorousvivApr. 29, 10 9:58 PM

But the writer is absolutely correct when stating the difficulty in getting a loan on these properties. I have good credit. I have enough money to put down. And I am not over-extended. There is a house just down the block that has been sitting vacant for over two years. The owner lives out of state and doesn't take care of it. I went through the house and saw the inspection report. It needs updates, but mostly cosmetic, which I have the money to do. And yet, I have been unable to secure a loan because of the loan size...under $35K. (Sold in 2006 for $77K) Worse still, not much available to rent in town besides apartments. But my sister owns a rental house here. And she has had at least 6 different parties approach her wondering if the house she rents out was available. (It's been rented to the same tenant for going on 4 years.) So I'm sure we could rent it once it's been cleaned up and updated. And it would be good for our town to have one less vacant, useless property rotting away. Yet the banks are just not willing to take the risk. So all those bailouts, IMHO...were for the cat's behind. What exactly was the point if they aren't willing to pump it back into the economy.

Brian_LarsonApr. 29, 1010:57 PM

I lived in Minneapolis. I've been on the neighborhood revitalization committees, did ride-a-longs with the police. Bought foreclosures and other rundown properties and fixed them up. But as they say no good deed ever goes unpunished. Soon you will be considered an evil landlord with tenants trashing the place then calling the Minneapolis housing inspector, who will write you up and fine you. When you go to eviction court the tenants will have free lawyers on their side saying that you are retaliating and the burden of proof will be on you. You might make it if you can be really tough and hard unless you are in the nicer parts of the city but I don't think this story is about a nicer part.


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