Tiny Seattle house takes a final stand

It is a classic story of David versus Goliath—the real estate edition. Only this time, David, a 600-square-foot Seattle home, may not emerge the victor, as the hours tick down to the end of an auction that will leave the structure's future uncertain.

For nearly a century, the tiny house, nestled on a 1,900-square-foot lot, was home to Edith Macefield. In 2006, when Ballard Blocks developers came calling with plans to turn the area into a retail mall, she did not answer the door, rejecting offers reportedly as high as $1 million. So the five-story mall went up around her, literally walling in her home. Her new neighbors were a UPS Store and a Ross Department store. The area is no longer zoned for residential properties, despite the last stand of the tiny house.

The structure, and the story, bear a striking resemblance to the 2009 Disney Pixar film, "Up," in which an elderly man fights a construction project and ends up using colorful balloons to lift his house up and away from all his troubles. And so, not surprisingly, Macefield's home in Seattle's Ballard neighborhood has come to be known as "the 'Up' house." Tourists and residents alike have added balloons with messages scrawled on them to the front gate. One says "Adventure is out there!"

That notoriety, however, came after Macefield passed away in 2008. Ironically, she left the home to Barry Martin, one of the construction workers who built the mall. As the project developed, so too did their friendship.

Read More US housing starts rise below expectations; permits fall

"I first met Edith right there," said Martin, pointing to a front corner of the house. "She was tending to her garden."

As Martin tells it, the story of the house really became bigger than Macefield. She only wanted to stay in the house, and didn't really mind the mall because she had been on the block by herself for a while. She actually looked forward to the noise and commotion of the people, he claimed.

"I see that she had lived here for a major portion of her life, and she just wanted to die here," he said. "She didn't understand what the big fuss was when she was still alive. She wouldn't want for it to be a memorial to her, but I'm pretty sure that's going to happen.

Macefield, who had no living family, wanted Martin to sell the house in order to pay college tuition for his children. And he did sell it, for $310,000, to an investor group called Reach Returns, which had all kinds of plans for the home, including, reportedly, putting it up on stilts. Instead it ended up defaulting on its loan. Now the lender is selling it in a closed bid auction. The deadline for offers is the end of the day Monday.

"I wouldn't be surprised if it sold for a quarter million dollars or less, and I wouldn't be surprised if it sold for over a million because there are no comparables," said Paul Thomas, the real estate agent representing the sellers. "There is nothing I can look at anywhere in this country that's anything like this to give myself a wide range, so I don't have a clue."

Read More Philly housing lifted by grads who stick around

Thomas said he has had hundreds of thousands of hits to his website and hundreds of inquiries. Some want to demolish the house, some even to lift it up and move it somewhere else. Several groups have tried to crowdfund the purchase of the home, but as of yet, nothing is firm.

"I think it's done a lot for the business people in this community and for the community as a whole," said Leslie Mehren, a nearby business owner and co-founder of the Ballard tourism office. "It has brought people down here from all over the world. It's becoming a destination, a place you have to see when you come to Seattle."

Read More Home builder sentiment rises 4 points to 56 in April

There is now a music festival in Macefield's name, a drink at a nearby restaurant and even a tattoo paying tribute to her.

As for the tiny house, real estate agent Thomas said he expects it will either be incorporated into the mall or transformed into a restaurant or office.

"It could be a pot shop," he added. Marijuana is legal in the state of Washington.

Thomas actually had to stage the home, which had been boarded up and was overgrown. He added windows and a front door. The white picket fence is long gone. While colorful balloons adorn the outside, there is literally nothing inside—just the shell of one woman's determination to hold on to her past ... and the way things were.

—CNBC producer Jessica Golden contributed to this report.