The best way I have found to succeed in this market is to shop for homes that are less then your max budget. So if you really don't want to go over $300,000, then shop at $260,000 or $270,000. You have to be prepared to go 3-10% above list price on high demand homes. Also, if you can't go higher on price then look for smaller houses or change locations. Honestly, the best houses for under $325,000 in the best locations are going to be in the Kenny area or Lake Nokomis community. I would be looking south of 46th, north of Minnehaha Creek, or just south of the creek in Diamond Lake. Morris Park and Minnehaha are great spots, you could get a really nice house over there. Standish and Ericsson are great as well.
The thing I have learned from living all over Minneapolis and selling all over Minneapolis is If you live in Lake Nokomis or Southwest it is basically the same. You get the same benefits living in Lake Nokomis because you are close to the lakes, parks, shops, and freeways, as being in Fulton, Linden Hills, Tangletown etc, but its cheaper. Standish, Ericsson, Morris Park, Minnehaha, Northrup, Bryant, all those places are great neighborhoods and will do very well. I think the upside for under $325,000 is a lot more over there because you get better homes for cheaper and you get the same stuff you get in Southwest. Unless you want to get a smaller home in Kenny and just buy it for the future lot value, but that if for another blog post.
I like the east side because there are three lakes, a parkway, Minnehaha Falls, a golf course, great schools, and two good grocery stores and co-ops. Plus a lot of the homes have been MAC updated with really nice Anderson double pane windows, newer furnaces, AC, insulation etc. The neighborhoods of Kenny and Armatage aren't much of a sleeper anymore, but I would just look for a smaller home or get something over by 48th and Chicago, Morris Park, Minnehaha, Ericcson area. The light rail is a huge value add on the east side and will continue to drive prices higher for homes that are close to it. Hope this helps.