Real Estate Market

[Just a civilian pilot]

I've run into those letters and pass them onto the seller. I remember getting one before and mentioning to the seller but I never even sent it to the seller as we had other offers that were higher and the seller didn't really care to see it.

I cared as I had my agent read them to me ( over the phone ) but I did find it heartbreaking how desperate some people are. In the end though, the person who offered the most with the least conditions won.

Problem is, people who complain how “greedy” ( sellers ) people are today, driving up housing prices , the people who won the bidding war would do the exact same thing when they sell if they can.

 

[incognito_2u]

So since the Pandemic struck, people are fleeing the big city (in droves) and heading out to the “Suburbs”, paying top dollar for property out here. There are stories of Houses being offered for Sale at an already inflated price and people bidding over that price Site-unseen........Sellers making out like Fat cats! Problem is, our Taxes are based on recent property sales and that is driving up our property values and also our Taxes......not bad if your planing on moving, but those that are staying will see their taxes increase in the foreseeable future......Now that I’m on a fixed Income , it kinda makes me want to look into putting my house on the Market and doing the NY to FL shuffle!

 

[PandaBear]

Once again, a horrible way to have to buy a home. Can you imagine trying to buy a car and having to outbid other people and the price on the car means nothing really?

”Drive until you qualify“ for a mortgage as homes near the city are too expensive.

When I was a kid, we moved a lot and my parents sold/bought many homes ( work transfers ) and a house was treated as a “home” more than an investment to the degree they are today and nobody was into renovating ( no Reno snows back then on TV ).

We already have bidding wars on car we want to buy, it is called dealer mark up and MSRP then negotiate down.

Regarding to renovation in investment vs home. I am not sure how things work back then but you see people renovate locations that have value vs just a suburb with unlimited greenfield for new construction. The places that has no land value because houses are valued as building first then land for almost nothing, tends to turn into lower income neighborhood and then downward spiral, so nobody bothers renovating, and certainly never rebuild / remodel.

Then the other extreme would be places who went up in value and people buying million dollar old shack to tear down and rebuild.

 

[Just a civilian pilot]

We already have bidding wars on car we want to buy, it is called dealer mark up and MSRP then negotiate down.

Regarding to renovation in investment vs home. I am not sure how things work back then but you see people renovate locations that have value vs just a suburb with unlimited greenfield for new construction. The places that has no land value because houses are valued as building first then land for almost nothing, tends to turn into lower income neighborhood and then downward spiral, so nobody bothers renovating, and certainly never rebuild / remodel.

Then the other extreme would be places who went up in value and people buying million dollar old shack to tear down and rebuild.

I hear why your saying about vehicles being marked up but it’s not causing people problems like it is with homes. That’s a negotiation issue ( which many have always said they don’t like the car buying process ), not a bidding war issue. You can still get thst vehicle.

Profit margins on cars ( not talking luxury ones people do not need versus want ) are nothing like on homes % wise. Anyone who wants a vehicle will get one, not the same with homes. Its a sellers market with homes, it’s still a balanced market with buying a car because there are no car shortages and you can drive to another dealer or drive outside the city where rural dealers will give a better price often.

A person who goes into a dealership can still afford to buy a vehicle ( and if they can‘t , they should be buying a second hame vehicle ) at full price , they just don’t want to and want the best price. There are no consumer complaints they cannot find enough cars to buy like with homes.

There are people who simply cannot afford homes that were once affordable and the “list price” isn’t even remotely close to what the seller will let it go for.

I hear lots of people say they hate the car buying experience but they always get the vehicle they can afford when they shop around but not the same with homes today.

 

[PandaBear]

I hear why your saying about vehicles being marked up but it’s not causing people problems like it is with homes. That’s a negotiation issue ( which many have always said they don’t like the car buying process ), not a bidding war issue. You can still get thst vehicle.

Profit margins on cars ( not talking luxury ones people do not need versus want ) are nothing like on homes % wise. Anyone who wants a vehicle will get one, not the same with homes. Its a sellers market with homes, it’s still a balanced market with buying a car because there are no car shortages and you can drive to another dealer or drive outside the city where rural dealers will give a better price often.

A person who goes into a dealership can still afford to buy a vehicle ( and if they can‘t , they should be buying a second hame vehicle ) at full price , they just don’t want to and want the best price. There are no consumer complaints they cannot find enough cars to buy like with homes.

There are people who simply cannot afford homes that were once affordable and the “list price” isn’t even remotely close to what the seller will let it go for.

I hear lots of people say they hate the car buying experience but they always get the vehicle they can afford when they shop around but not the same with homes today.

Negotiation is the same as bidding, it is the final price that's the market price and demand vs supply still apply.

Cars can be moved, homes cannot, that's probably the only thing matters between the 2. The prices of home went up because the area prices went up, it is no longer the same market when it transform from a farmland to suburb to business park with tons of good jobs. You cannot just expect the same farmers or mechanics or truck drivers not to be priced out in this scenario.

 

[Just a civilian pilot]

Negotiation is the same as bidding, it is the final price that's the market price and demand vs supply still apply.

Cars can be moved, homes cannot, that's probably the only thing matters between the 2. The prices of home went up because the area prices went up, it is no longer the same market when it transform from a farmland to suburb to business park with tons of good jobs. You cannot just expect the same farmers or mechanics or truck drivers not to be priced out in this scenario.

I do not hear anyone complaining of not being able to buy a car ( shortage...normal cars ) or the pricing being irrational, they just hate the process ( which has always been unpleasant ).

No debate negotiation is the same as bidding, my comment was about the “price war” you mentioned when buying a car. It doesn’t exist with respect to the problems people are facing when buying ( trying ) a home.

The negotiation process ( or price war as you call it ) when buying a vehicle is balanced and involves give and take by the seller and buyer ( or they will but it somewhere else ) but when a person wants to buy a home in a price war, there is no give and take, it’s a sellers market. When I sold my home ( when we had our first price war ) , it was all about me the seller, not the buyer. If they didn’t like it they could TRY and buy a home somewhere else but they would be in the same boat.

Irrational pricing is the hallmark of a price war .....just like with too many airlines that try and undercut competitors to gain market share and lose money in the process. Why so many went bankrupt.

Lots of deals on cars where I live , but not with homes.

Nice debating you on the subject, I do not think we will ever agree on this subject.

 

[alarmguy]

Nothing is irrational with the price of homes or real estate.
It’s like anything else, supply and demand, throw in sky high lumber prices due to Covid.
If you can’t afford a home then you haven’t saved enough or worked hard enough to do so in your area.
Options are to work harder or save more or move to a more affordable area of the country or wait it out for more homes and lower lumber prices post Covid to hit the market.
Bottom line is don’t blame others if you can’t buy a home because people are buying homes on the market.
Have patience after a worldwide event for supply to catch up with demand.
The negotiation process is a selfish dream by the buyer that the seller will sell the home for less money then they list it for.
Don’t get mad at a seller if he or she won’t discount the asking price because the buyer thinks they should.

 

[Just a civilian pilot]

I would say things are not functioning properly when people’s incomes cannot keep up with housing prices and thats from a person who benefitted from selling mine in my city’s first price war. If there is a housing market collapse one day, just watch, all we will hear about is how wrong things were and home owners complaining. The housing industry plays a much bigger role in the economy than before.

Ultra low rates have not caused inflation with goods but they have with assets like homes.

Its good to be able to debate stuff like this but most of us will not have our minds changed on BITOG.

Where I live, prices are higher than they should be but we are not allowed to talk about certain subjects so I will just leave it at that. Supply and demand is made worse by bad policy versus not having a good enough job, not working hard enough or saving enough.

Lumber prices have zero to do with why my used home went for an insane price above asking.

 

[alarmguy]

Peoples incomes have kept up with housing, it’s why homes are selling as fast as they hit the market.
Home prices are whatever the public is willing to pay, the banks able to lend and obviously they are paying as well as the banks lending.
There is no crisis except in the media who will say anything to keep your attention.

 

[Just a civilian pilot]

Peoples incomes are not keeping up with home prices where I live, they are just willing to pay more for them ( the ones who win the price war ) and take on more debt.

How do I know? I talk to people who are looking around and the woman who bought mine.

I am an airline pilot ( union job too ) , my pay has not gone up over the years except for minimal inflationary increases which are not keeping up with home prices. In addition to that , we never recovered what we lost in the last bankruptcy 15 years ago.

The only groups I see making more money are public servants mainly. Good thing my wife is a public servant.

 

[eljefino]

Money finds money. All these stimmys work their way to the wealthy who then invest them in real estate and stocks.

You won't find anywhere to stick it, besides cash, that can wait around for the RE bubble to burst without losing a proportionate amount.

 

[Passport1]

Just sold my primary residence Friday for $5K more than the asking price. It was listed late Wednesday. I got tired of the showings so I took it. Today I offered cash asking price for a bigger house. Too little, too late. According to Zillow, my beach house increased $12K last month, $27K more this month.

Insane

 

[Dave Hess]

So since the Pandemic struck, people are fleeing the big city (in droves) and heading out to the “Suburbs”, paying top dollar for property out here. There are stories of Houses being offered for Sale at an already inflated price and people bidding over that price Site-unseen........Sellers making out like Fat cats! Problem is, our Taxes are based on recent property sales and that is driving up our property values and also our Taxes......not bad if your planing on moving, but those that are staying will see their taxes increase in the foreseeable future......Now that I’m on a fixed Income , it kinda makes me want to look into putting my house on the Market and doing the NY to FL shuffle!

Wealthy folks were buying property in the Hamptons and not mind paying top dollar just to get out of city.
Personally I’d want to get out of NY unless I was still working and needed to be in NY.

Maybe because it’s spring break, but I’m seeing lots of NY license plates on the highway down here daily.

 

[PandaBear]

Peoples incomes are not keeping up with home prices where I live, they are just willing to pay more for them ( the ones who win the price war ) and take on more debt.

How do I know? I talk to people who are looking around and the woman who bought mine.

I am an airline pilot ( union job too ) , my pay has not gone up over the years except for minimal inflationary increases which are not keeping up with home prices. In addition to that , we never recovered what we lost in the last bankruptcy 15 years ago.

The only groups I see making more money are public servants mainly. Good thing my wife is a public servant.

You need to understand, people you know are not able to keep up doesn't mean other people have not been able to keep up.

There are a lot of stock appreciation going on, there are a lot of remote jobs going on, and people might be cashing out their sales in even more expensive area to move to your neighborhood.

Bozeman has nothing other than near Yellowstone, and its prices went up like crazy, because people finally get to achieve their dream of working in some jobs that pay well remotely and still be able to live near Yellowstone. If you ask people who lived there for decades they will all say their income haven't kept up. The prove is "the only groups I see making more money are public servants", your survey is really flawed if this is the only conclusion you can reach.

I wish to move into a 4 bedroom house in my neighborhood too, and all the people I talked to recently (who I worked with for the last 3 years) haven't gotten much more than 20% increase over the last 5 years total. How did my neighborhood end up with these 2.5M 4 bedroom average home price?

They are from other buyers who cashed out stock appreciation, or their startup jobs finally IPO, or people who got priced out of the 4M neighborhood.

What am I going to do? I am shopping for bunk bed, that's what I am doing right now. At least they still sell $199 twin over twin convertible beds at walmart.

 

[alarmguy]

Peoples incomes are not keeping up with home prices where I live, they are just willing to pay more for them ( the ones who win the price war ) and take on more debt.
..

Peoples incomes are keeping up with the home prices or they would not be able to purchase it. Homes are selling, prices rising because people can afford to purchase. Interest rates at a low almost never seen in this country.
Once interest rates rise, if ever during my lifetime, to lets say 8% instead of 3% ... home prices will come down but the payment will be the same because rates will be higher.
Again, its the payment, not the home price and not the interest rate. They are both the same because between the two they factor in what the actually monthly payment will be and ultimately settle on the price the public is willing and able to pay.

If homes were unaffordable they would not sell and the prices would come down to a level so they would sell.
Its really that simple.

 

[Dave Hess]

My nephew recently bought a townhouse and there was a few potential buyers bidding up the price. Luckily his dad (my brother) helped him with some extra $$$ to win the bidding war.

Thats happening across the USA and Canada. Folks know if they want to buy something they will just have to pay extra.

Kind of like 10 lb bags of ice after a hurricane and no electricity with summer temps of 95 F degrees, you’ll pay the increased price to cool down.

 

[Just a civilian pilot]

Peoples incomes are keeping up with the home prices or they would not be able to purchase it. Homes are selling, prices rising because people can afford to purchase. Interest rates at a low almost never seen in this country.
Once interest rates rise, if ever during my lifetime, to lets say 8% instead of 3% ... home prices will come down but the payment will be the same because rates will be higher.
Again, its the payment, not the home price and not the interest rate. They are both the same because between the two they factor in what the actually monthly payment will be and ultimately settle on the price the public is willing and able to pay.

If homes were unaffordable they would not sell and the prices would come down to a level so they would sell.
Its really that simple.

Interest rates have been low for a generation, we have seen this for a long time now.

 

[Just a civilian pilot]

FWIW, the original question by the OP asked about real estate in YOUR AREA. My comments are about where I live.

My home was on the market less than a week and had 15 offers ....it sold for 35% what it was listed for. Its worth even more now, a lot more. Many other homes go for a lot more % than that as it’s just gotten worse.

Where I live ( our first price war ) , housing IS unaffordable for more and more people ; home prices are going up WAY faster than their incomes.

Its mainly driven by people Moving from another huge city and driving up prices and they can afford it because they sold their homes for a fortune before moving here ( and they didn’t pay a fortune when they bought it ) . They are able to out bid people because they had massive equity in their homes when they sold it and not because they had great jobs or their incomes are rising as fast as homes prices in my area. It’s not driven by home speculators.

I am not complaining , I was a seller and benefitted from it.

It’s that simple.

 

[PandaBear]

Interest rates have been low for a generation, we have seen this for a long time now.

And we have seen those bidding wars since at least 2014 now, it is finally flowing into your area, because of record stock price and remote jobs.

Edit: just saw your post and yes, I think you agree what is going on.

 

[Just a civilian pilot]

And we have seen those bidding wars since at least 2014 now, it is finally flowing into your area, because of record stock price and remote jobs.

Edit: just saw your post and yes, I think you agree what is going on.

With respect to my area, I don’t agree other than we are now living in an area with bidding wars. No argument about that that.

But I definitely do not agree with people‘s incomes are keeping up with housing prices where I live. It’s unaffordable for more and more people people in this area and it wouldn’t if people‘s incomes were keeping up.

I benefitted from our bidding war.