Deja Vu.. are there too many houses for sale?

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BogleMelon
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Deja Vu.. are there too many houses for sale?

Post by BogleMelon »

I notice that there are too many houses for sale in my neighborhood. That reminds me of the last crisis. Do you notice the same thing in your area? Or it is just me?
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foo.c
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Re: Deja Vu.. are there too many houses for sale?

Post by foo.c »

I would see that as more positive than negative. Now if you see houses being flipped in your neighborhood ...
renue74
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Re: Deja Vu.. are there too many houses for sale?

Post by renue74 »

I'm not sure where you're located, but in the Charlotte area home inventory is very tight and bidding wars are the norm for some neighborhoods.

What's different from 2007?

• Home inventory is tight. All the smaller, local builders who were building in the mid-2000s are not building now. Either they moved onto other jobs or whatever. So that means inventory is very tight. There are no large tract home developments being built in this area like there were before.

• Banks are still stingy with their loans. It's not like 2005 where you could walk into a bank and they throw money at you. You still have to jump through a lot of hoops like "debt to income" ratios, etc. Easy money is pretty hard to get.

• Real estate is fairly hyper localized. Just because your neighborhood has a ton of inventory doesn't mean it's the norm across markets. I live in a bedroom community of CLT and the city has put a moratorium on multi-family housing stock outside of a very local city center. That means folks looking to rent are having even more difficulty finding something...in addition to the small amount of real estate for sale. We've never had bidding wars in my city...but we do now. (Once again...a hyper local phenomena example.)
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prudent
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Re: Deja Vu.. are there too many houses for sale?

Post by prudent »

All real estate is local. In our area, there is a huge shortage of homes for sale in middle-class areas. Friends just sold their 90-year-old house. It's got a weird layout, it's very small, 1 bathroom (off the kitchen!), and you have to climb steps to get to the house from the street. No garage, tiny yard and needs work. They're selling because they're moving out of state for a job and I was afraid it would take forever to sell. They bought 2 years ago for $62K, sold in one day for $90K with multiple offers. My cousin is a RE agent and her biggest problem is finding homes to sell. Anything under $250K that is in decent shape and not overpriced is gone in a few days.
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8foot7
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Re: Deja Vu.. are there too many houses for sale?

Post by 8foot7 »

renue74 wrote:I'm not sure where you're located, but in the Charlotte area home inventory is very tight and bidding wars are the norm for some neighborhoods.

What's different from 2007?

• Home inventory is tight. All the smaller, local builders who were building in the mid-2000s are not building now. Either they moved onto other jobs or whatever. So that means inventory is very tight. There are no large tract home developments being built in this area like there were before.

• Banks are still stingy with their loans. It's not like 2005 where you could walk into a bank and they throw money at you. You still have to jump through a lot of hoops like "debt to income" ratios, etc. Easy money is pretty hard to get.

• Real estate is fairly hyper localized. Just because your neighborhood has a ton of inventory doesn't mean it's the norm across markets. I live in a bedroom community of CLT and the city has put a moratorium on multi-family housing stock outside of a very local city center. That means folks looking to rent are having even more difficulty finding something...in addition to the small amount of real estate for sale. We've never had bidding wars in my city...but we do now. (Once again...a hyper local phenomena example.)
Charlotte appears to be a bifurcating market. Inventory under 250k is very low and sells quickly, often with multiple offers. Get much above 250K and interest quickly wanes, to the point where average days on market in some pockets exceeds 100 days. It is an interesting phenomenon. We are selling at high 300s and were sickened to be going into month 4 of being on the market when much lower quality homes at 230-240k were going in 24 hours or less. We did manage to sell however and we close on Friday. Moving into a higher price point where the activity is even lower, but I don't care, because I've told everyone I'm going to die in this new house.

I do note a ton of tract home neighborhoods in southwest Charlotte and north Charlotte so that is definitely still going on. Mortgages are still tight as you say but we are not having a real hard time getting a jumbo loan at this time. It certainly is harder than it was in the 2000-2007 period.
pangea33
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Re: Deja Vu.. are there too many houses for sale?

Post by pangea33 »

I think location is the main key. As long as the houses are selling, then it's a sign the market is hot and long timers can finally get the equity out of their investments for an upgrade elsewhere. If they all just sit on the market, that probably indicates people are trying to abandon the area.

Here in Cary, NC 27513 houses have multiple offers within the first day or two, usually for more than the asking price. They're building like crazy too, but the people seem to just keep coming.
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Re: Deja Vu.. are there too many houses for sale?

Post by Top99% »

I agree with others that this is generally a good sign. Now if HGTV starts airing "make money fast by flipping houses" shows left and right again *that* would be a concern.
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Re: Deja Vu.. are there too many houses for sale?

Post by GoldenFinch »

Where I live houses are not selling at all. They are just sitting there.

For reference I'm in a mid-ring, upper scale suburb in the rust belt with high taxes.
renue74
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Re: Deja Vu.. are there too many houses for sale?

Post by renue74 »

8foot7 wrote:
renue74 wrote:I'm not sure where you're located, but in the Charlotte area home inventory is very tight and bidding wars are the norm for some neighborhoods.

What's different from 2007?

• Home inventory is tight. All the smaller, local builders who were building in the mid-2000s are not building now. Either they moved onto other jobs or whatever. So that means inventory is very tight. There are no large tract home developments being built in this area like there were before.

• Banks are still stingy with their loans. It's not like 2005 where you could walk into a bank and they throw money at you. You still have to jump through a lot of hoops like "debt to income" ratios, etc. Easy money is pretty hard to get.

• Real estate is fairly hyper localized. Just because your neighborhood has a ton of inventory doesn't mean it's the norm across markets. I live in a bedroom community of CLT and the city has put a moratorium on multi-family housing stock outside of a very local city center. That means folks looking to rent are having even more difficulty finding something...in addition to the small amount of real estate for sale. We've never had bidding wars in my city...but we do now. (Once again...a hyper local phenomena example.)
Charlotte appears to be a bifurcating market. Inventory under 250k is very low and sells quickly, often with multiple offers. Get much above 250K and interest quickly wanes, to the point where average days on market in some pockets exceeds 100 days. It is an interesting phenomenon. We are selling at high 300s and were sickened to be going into month 4 of being on the market when much lower quality homes at 230-240k were going in 24 hours or less. We did manage to sell however and we close on Friday. Moving into a higher price point where the activity is even lower, but I don't care, because I've told everyone I'm going to die in this new house.

I do note a ton of tract home neighborhoods in southwest Charlotte and north Charlotte so that is definitely still going on. Mortgages are still tight as you say but we are not having a real hard time getting a jumbo loan at this time. It certainly is harder than it was in the 2000-2007 period.
I live about 25 minutes south of Charlotte. Our home estimate is $300K and we get weekly calls and postcards from realtors wanting to sell our house. We live in a decent school district directly across the street from the main schools....not a very transient neighborhood.

I bought rental property in town about 3 years ago and slowly have been selling it off on craigslist for 2x what I paid for them. I've stopped looking for new rental property because of the shark feeding frenzy when trying to purchase rental houses.

I don't think the market is overheated where I'm at....but we are not actively looking for another home and I wouldn't consider doing so now.
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Re: Deja Vu.. are there too many houses for sale?

Post by MoonOrb »

Where I live there are too few homes for sale. A coworker is house hunting and has been outbid several times in the last few weeks: all cash offers waiving inspection and $100k+ over listing price. Just last night I heard that a friend's mother was outbid when she made an all cash offer of $1.3m on a house listed at less than $900k.

So while on one hand this seems completely untethered from reality, it appears to reflect the law of supply and demand. The issue isn't easy credit, since it's not that credit buyers are buying houses; it's also not the case that many new houses are being built.

I'll worry when vast neighborhoods of McMansions are being gobbled up by low wage workers using interest only loans or ARMs with wacky teaser rates. (I have plenty to worry about right now, but the local housing market is not one of them).
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Re: Deja Vu.. are there too many houses for sale?

Post by BogleMelon »

MoonOrb wrote: Just last night I heard that a friend's mother was outbid when she made an all cash offer of $1.3m on a house listed at less than $900k.
I never bought a house in US. I am a renter. I don't understand how can one decide if the listed price is too low and he would be better off to offer more than listed and not less.
In other words, if a seller offers his house at $400K and he got an offer for $500K, will I (as another buyer) will get that information before I bid so that I can bid more than the $500K?
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MoonOrb
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Re: Deja Vu.. are there too many houses for sale?

Post by MoonOrb »

BogleMelon wrote:
MoonOrb wrote: Just last night I heard that a friend's mother was outbid when she made an all cash offer of $1.3m on a house listed at less than $900k.
I never bought a house in US. I am a renter. I don't understand how can one decide if the listed price is too low and he would be better off to offer more than listed and not less.
In other words, if a seller offers his house at $400K and he got an offer for $500K, will I (as another buyer) will get that information before I bid so that I can bid more than the $500K?
Typically no--sellers review all offers at a time specified in advance--prospective buyers put "escalator" clauses in their offers saying they will bid, say, $350k but will outbid any competing offers by $2000 (or whatever) up to a limit, like $475k.

Also, a buyer's agent should theoretically have the insight to say whether an opening bid should be above below or at the list price.
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BogleMelon
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Re: Deja Vu.. are there too many houses for sale?

Post by BogleMelon »

MoonOrb wrote:
BogleMelon wrote:
MoonOrb wrote: Just last night I heard that a friend's mother was outbid when she made an all cash offer of $1.3m on a house listed at less than $900k.
I never bought a house in US. I am a renter. I don't understand how can one decide if the listed price is too low and he would be better off to offer more than listed and not less.
In other words, if a seller offers his house at $400K and he got an offer for $500K, will I (as another buyer) will get that information before I bid so that I can bid more than the $500K?
Typically no--sellers review all offers at a time specified in advance--prospective buyers put "escalator" clauses in their offers saying they will bid, say, $350k but will outbid any competing offers by $2000 (or whatever) up to a limit, like $475k.

Also, a buyer's agent should theoretically have the insight to say whether an opening bid should be above below or at the list price.
So there is an:
Opening bid which means I will pay $XXX in case no one outbid me.
And there is an complementary bid in which I say "if and only if, someone is higher than me, then in that case I can go up till $YYY"

Am I getting that right?
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Re: Deja Vu.. are there too many houses for sale?

Post by djpeteski »

There are basically no homes for sale in my neighborhood of 1300 homes. It is part of Orlando, but not very swanky, and thus people do not brag about living there. However, the price per square foot is attractive while still being pretty darn nice, within walking distance to good schools, and being within a short drive to the ocean.

If a house goes on the market for something reasonable, it sells quickly (like within the week). Currently, there are two homes for sale, both by owner, and I know one is really pushing the pricing envelope.

That, to me, would suggest a shortage of homes.
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Re: Deja Vu.. are there too many houses for sale?

Post by BogleMelon »

How do you guys know about how much it would take the nearby houses to sell?!
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Re: Deja Vu.. are there too many houses for sale?

Post by MoonOrb »

BogleMelon wrote:
MoonOrb wrote:
BogleMelon wrote:
MoonOrb wrote: Just last night I heard that a friend's mother was outbid when she made an all cash offer of $1.3m on a house listed at less than $900k.
I never bought a house in US. I am a renter. I don't understand how can one decide if the listed price is too low and he would be better off to offer more than listed and not less.
In other words, if a seller offers his house at $400K and he got an offer for $500K, will I (as another buyer) will get that information before I bid so that I can bid more than the $500K?
Typically no--sellers review all offers at a time specified in advance--prospective buyers put "escalator" clauses in their offers saying they will bid, say, $350k but will outbid any competing offers by $2000 (or whatever) up to a limit, like $475k.

Also, a buyer's agent should theoretically have the insight to say whether an opening bid should be above below or at the list price.
So there is an:
Opening bid which means I will pay $XXX in case no one outbid me.
And there is an complementary bid in which I say "if and only if, someone is higher than me, then in that case I can go up till $YYY"

Am I getting that right?
Yes, that's it. It's something that seems to come up in situations where a number of competing bids are expected. I cannot really imagine purchasing a house under those conditions frankly.
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Re: Deja Vu.. are there too many houses for sale?

Post by ryman554 »

MoonOrb wrote: Typically no--sellers review all offers at a time specified in advance--prospective buyers put "escalator" clauses in their offers saying they will bid, say, $350k but will outbid any competing offers by $2000 (or whatever) up to a limit, like $475k.
Who in their right mind would make an offer like that? It's certainly a good way to pay your upper limit. All the sellers need is a "friend" to place an offer at 473k and get "outbid".

Plus, as a seller, I'd be quite annoyed by this strategy to the point where I'd choose a different buyer on principle for trying to lowball me.
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Re: Deja Vu.. are there too many houses for sale?

Post by Frisco Kid »

MoonOrb, sounds like the Bay Area! 40% over asking and losing the deal almost defies logic. What area are you referring to?
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Re: Deja Vu.. are there too many houses for sale?

Post by chevca »

ryman554 wrote:
MoonOrb wrote: Typically no--sellers review all offers at a time specified in advance--prospective buyers put "escalator" clauses in their offers saying they will bid, say, $350k but will outbid any competing offers by $2000 (or whatever) up to a limit, like $475k.
Who in their right mind would make an offer like that? It's certainly a good way to pay your upper limit. All the sellers need is a "friend" to place an offer at 473k and get "outbid".

Plus, as a seller, I'd be quite annoyed by this strategy to the point where I'd choose a different buyer on principle for trying to lowball me.
In the "hot" housing markets, that is a very common offer practice.

It's not that they're "lowballing" the buyer. It is that they know almost certainly there will be other and higher offers. In the hot markets, the initial number should be at least the asking price, if not over.

In those markets, the "friend" idea isn't needed. Not to mention, that would be pretty darn shady.
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Re: Deja Vu.. are there too many houses for sale?

Post by MrNewEngland »

BogleMelon wrote:I notice that there are too many houses for sale in my neighborhood. That reminds me of the last crisis. Do you notice the same thing in your area? Or it is just me?
I am in Charlotte, NC and I just went under contract to sell my place. Every realtor I spoke to said there isn't enough inventory right now. My place was under contract for over the asking price in less than 48 hours and I had 4 offers that were almost identical to the one I took.

So I am not sure what area you are in but the consensus of the people I have spoken to is that there are not too many houses on the market.
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Re: Deja Vu.. are there too many houses for sale?

Post by ryman554 »

chevca wrote:
ryman554 wrote:
MoonOrb wrote: Typically no--sellers review all offers at a time specified in advance--prospective buyers put "escalator" clauses in their offers saying they will bid, say, $350k but will outbid any competing offers by $2000 (or whatever) up to a limit, like $475k.
Who in their right mind would make an offer like that? It's certainly a good way to pay your upper limit. All the sellers need is a "friend" to place an offer at 473k and get "outbid".

Plus, as a seller, I'd be quite annoyed by this strategy to the point where I'd choose a different buyer on principle for trying to lowball me.

In the "hot" housing markets, that is a very common offer practice.

It's not that they're "lowballing" the buyer. It is that they know almost certainly there will be other and higher offers. In the hot markets, the initial number should be at least the asking price, if not over.

In those markets, the "friend" idea isn't needed. Not to mention, that would be pretty darn shady.
I live in the bay area, so I know about the hot market. Even in this market, it still makes no sense. As a seller, if a buyer tells me that he will pay 1M, but will go to 1.2 with competing offer, that tells me he will pay 1.2. why would I accept 1.0? The first thing I would do is counter at 1.3 and call it a multiple bid situation. Or accept the 1.2 offer.

Shady or not, this no buyer just gave away all leverage by giving a range.
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Re: Deja Vu.. are there too many houses for sale?

Post by chevca »

You don't have to accept the 1.0 offer. You could turn it down if you chose to. But, what if you don't get a 1.1 or 1.2 offer?

You let the offer with the elevator clause in there sit. In a hot market, you're likely getting offers left and right. It's basically the buyers way of saying they will do the bidding war up to whatever amount. It saves everyone time, really. And, shows how much they want the home up to whatever price.

It makes plenty of sense, really. I sold a home last year where the buyer had a deal like this in their offer. Two offers cam in higher than their initial offer, but the amount they were willing to go/bid up to won them the sale.

I won't even get into the ethics of how you would handle that....
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Re: Deja Vu.. are there too many houses for sale?

Post by furikake »

I have a realtor friend who told me that houses less than $400k were selling like hot cakes in this area (Dallas, TX). In my neighborhood, there are 2 houses for sale, one for 1.2mil, another asking for 1.4mil, both have been sitting there for quite some time now, they're not selling. I hope they don't sell because they're overpriced. If they sell at those prices, that means that I may have to pay more on my property taxes next year. I do see quite a lot of places that are still building new houses. I hope they will finish building before the market crashes which can be anytime now.
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Re: Deja Vu.. are there too many houses for sale?

Post by TSquare »

Minnesotan here. I live about 10 minutes from downtown Minneapolis, in what we call a first ring suburb (inside the freeway outer-belts). The local fish wrap factory printed a story 2 weeks ago about the dearth of homes for sale in the metro area. Houses priced at ~300k and below are going into contract in a matter of days.

On a related note, the amount of real estate related posts on BH lately seems to be increasing. People prognosticating left and right. I don't see it as anything other than trying to market time real estate.

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Re: Deja Vu.. are there too many houses for sale?

Post by Broken Man 1999 »

There aren't many homes in my neighborhood for sale, at least there aren't many "For Sale" signs. And, even during the housing meltdown there seemed to be few homes for sale. A couple of homes were vacant for a few years, tied up in some type of issue, but even they have finally been purchased.

Some townhomes in the complex where my daughter has her rental have sold for eye-popping amounts, so good she is going to sell her unit when her tenant's lease expires.

Maybe more homes are being sold without going thru the normal motions of listing and hanging up the "For Sale" sign.

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Re: Deja Vu.. are there too many houses for sale?

Post by steadyeddy »

Same story here; not enough inventory. House prices seem frothy to me, but with 30% of sales done for all cash, it doesn't look like a bubble. I guess I need to re-anchor on higher prices! :)
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Re: Deja Vu.. are there too many houses for sale?

Post by Pajamas »

prudent wrote:All real estate is local.
10,000 x this.

Friends live in a reasonably nice neighborhood in a medium-sized city that got hit hard during the financial crisis. They bought just before housing prices dived and are just now coming out even. Only a couple of houses are for sale in their neighborhood. When they were going for half of what they are now, or even less, there were dozens on the market.

To me, it is somewhat counter-intuitive. Seems like many people would be wanting to sell their houses when current values are high and there is a lot of demand. Seems like some would at least offer their houses for sale above market just in case someone nibbled. Nope. People clamor to sell when prices are low and buy when prices are high.

You can see examples of the latter here on Bogleheads: people in the Bay area or NYC area desperate to buy at record prices and there is little inventory available so they are settling for less instead of waiting it out.

Then you have others saying "move from a high cost of living area to a low cost of living area for cheap housing." Those low-cost areas are low-cost for reasons. They are suitable for some but not for others, same as high-cost areas. But people want to apply their own perceptions and values to other people and other places.

I think it might be more helpful to look at months on the market and inventory supply vs. demand in months instead of just raw numbers of listings. The demand side is as important as the supply.
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Re: Deja Vu.. are there too many houses for sale?

Post by adamthesmythe »

> Seems like many people would be wanting to sell their houses when current values are high

Many, but not all, people sell when they need to sell. For a move or financial stress.

It's a rare person that puts a house up for sale for no other reason than that prices are high. After all, once he sells he still needs to find a place to live. If you plan to buy or sell in the same area it doesn't matter what prices are as long as houses are moving.

House prices are "sticky downward." It's the old reluctance to realize a loss sort of reasoning.

But anyway in response to OP. Most areas of the country right now have too few houses to sell, not too many. If you are looking to rationalize why we are in a bubble you look at rising prices and strong competition for what little is for sale. The problem is- strong demand doesn't necessarily mean a crash is imminent. It could just mean that there is an enduring shortage.
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Re: Deja Vu.. are there too many houses for sale?

Post by TSquare »

Pajamas wrote:People clamor to sell when prices are low and buy when prices are high.
When I bought my first property in 2006, I was on the fence about pulling the trigger. My parents nudged me by saying that the price is only going up, and how housing prices never drop, etc. etc.
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Re: Deja Vu.. are there too many houses for sale?

Post by Pajamas »

TSquare wrote:
Pajamas wrote:People clamor to sell when prices are low and buy when prices are high.
When I bought my first property in 2006, I was on the fence about pulling the trigger. My parents nudged me by saying that the price is only going up, and how housing prices never drop, etc. etc.
Just curious, did you go underwater, are you still underwater, are you ahead, when did you break even, etc.? (You don't have to answer if you don't want to, of course.)

When I bought my apartment near the bottom of the market in the mid-90s, people were having trouble selling them even though buying was cheaper than renting.
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Re: Deja Vu.. are there too many houses for sale?

Post by Texanbybirth »

Nowhere near enough for sale in our neighborhood. (North Dallas suburb) We're the "nice" neighborhood next to the "really nice" neighborhood on the golf course. (Though our park is bigger and better ;-) People are busting down the doors to get in, but a cursory glance at realtor.com indicates there's only 1 house for sale right now out of about 1200-1500. (Two are pending, and the one in question is under "Active Option Contract".) We could probably sell our house for 40% more than we paid for it 2 years ago doing almost no work, 60-70% more with minimal effort, but we're happy here and have no plans to move. :beer
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TSquare
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Re: Deja Vu.. are there too many houses for sale?

Post by TSquare »

Pajamas wrote:
TSquare wrote:
Pajamas wrote:People clamor to sell when prices are low and buy when prices are high.
When I bought my first property in 2006, I was on the fence about pulling the trigger. My parents nudged me by saying that the price is only going up, and how housing prices never drop, etc. etc.
Just curious, did you go underwater, are you still underwater, are you ahead, when did you break even, etc.? (You don't have to answer if you don't want to, of course.)

When I bought my apartment near the bottom of the market in the mid-90s, people were having trouble selling them even though buying was cheaper than renting.
Definitely went underwater. Purchased townhome in Jan 2006 for $228K, sold July 2017 for $180K. I had been throwing extra money at the principal each month, and I walked away with about $30K in my pocket.
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matjen
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Re: Deja Vu.. are there too many houses for sale?

Post by matjen »

Well this is timely.

Baby Boomers Who Refuse to Sell Are Dominating the Housing Market
https://www.bloomberg.com/news/articles ... ing-market
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Re: Deja Vu.. are there too many houses for sale?

Post by rec7 »

Supply tight here in St Louis. They seem to be selling fast.
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Re: Deja Vu.. are there too many houses for sale?

Post by STINGRAY75 »

ryman554 wrote:
chevca wrote:
ryman554 wrote:
MoonOrb wrote: Typically no--sellers review all offers at a time specified in advance--prospective buyers put "escalator" clauses in their offers saying they will bid, say, $350k but will outbid any competing offers by $2000 (or whatever) up to a limit, like $475k.
Who in their right mind would make an offer like that? It's certainly a good way to pay your upper limit. All the sellers need is a "friend" to place an offer at 473k and get "outbid".

Plus, as a seller, I'd be quite annoyed by this strategy to the point where I'd choose a different buyer on principle for trying to lowball me.

In the "hot" housing markets, that is a very common offer practice.

It's not that they're "lowballing" the buyer. It is that they know almost certainly there will be other and higher offers. In the hot markets, the initial number should be at least the asking price, if not over.

In those markets, the "friend" idea isn't needed. Not to mention, that would be pretty darn shady.
I live in the bay area, so I know about the hot market. Even in this market, it still makes no sense. As a seller, if a buyer tells me that he will pay 1M, but will go to 1.2 with competing offer, that tells me he will pay 1.2. why would I accept 1.0? The first thing I would do is counter at 1.3 and call it a multiple bid situation. Or accept the 1.2 offer.

Shady or not, this no buyer just gave away all leverage by giving a range.

Recent seller in SE Wisconsin area here. House went on the market, had a steady of line of traffic the first night and multiple offers the next morning - all over asking and one with an escalator clause. Some seem to think the escalator assures them of a contract but fail to realize that the seller has an opportunity to counter ALL offers when multiples exist. We saw it as an arrogant approach that did nothing but re-establish our expectation of a selling price. His was not the highest offer. We counter offered to all and he was less than happy to the point that his offer was reduced to under asking. (arrogance confirmed) Of the others, 1 accepted our CO, 1 bowed out and 1 went over our counter offer - the house went into contract.

There are very few homes for sale in our area It's a sellers market. If your a buyer, come in with a story not a demand with deadlines.
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Pajamas
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Re: Deja Vu.. are there too many houses for sale?

Post by Pajamas »

TSquare wrote:
Definitely went underwater. Purchased townhome in Jan 2006 for $228K, sold July 2017 for $180K. I had been throwing extra money at the principal each month, and I walked away with about $30K in my pocket.
I am very sorry to hear that but I guess you are glad to finally have that settled and done with.

It does prove that giving in to that feeling of pressure to buy because prices are going up does not always work out well and that patience can pay off and your experience can serve as a lesson for others.
matjen wrote:Well this is timely.

Baby Boomers Who Refuse to Sell Are Dominating the Housing Market
https://www.bloomberg.com/news/articles ... ing-market
The whole premise of that article is silly. That man has fixated on one neighborhood. There are plenty of decent neighborhoods in Philadelphia where $200k can buy a lot of house. You can't pick up a habitable rowhouse there for $10k like you could during the financial crisis, but you can certainly get one for $200k. You could also buy a nice apartment in a great neighborhood.
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matjen
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Re: Deja Vu.. are there too many houses for sale?

Post by matjen »

Pajamas wrote: The whole premise of that article is silly. That man has fixated on one neighborhood. There are plenty of decent neighborhoods in Philadelphia where $200k can buy a lot of house. You can't pick up a habitable rowhouse there for $10k like you could during the financial crisis, but you can certainly get one for $200k. You could also buy a nice apartment in a great neighborhood.
Agree with the narrative about the youngster being rather silly. The more important/relevant parts are the chart and quotes/stats from the "experts."
A man is rich in proportion to the number of things he can afford to let alone.
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Johnnie
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Re: Deja Vu.. are there too many houses for sale?

Post by Johnnie »

In 2003 I paid $150k for a nice 1,800 sf, four bedroom, one-level, full basement, "mid-century-modern" home on a lovely lot in a medium-size Michigan city that has a mediocre but not awful economy. The seller had paid $120k three years earlier.

I could probably get around $150k for it today. <shrug>
"I know nothing."
Billionaire
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Re: Deja Vu.. are there too many houses for sale?

Post by Billionaire »

In my neighborhood the houses sell, but they still need to be priced correctly and show well. Two doors down from us a house is for sale. They just held their sixth open house. We walked through and the house does not show well. The front gate does not open cleanly. The front porch needs a coat of stain. Right off the bat, you get a bad feeling. The inside of the house was meh. They really needed to spend some money and prep it for sale.
This family has lived in the house for only two years, so they don't have a lot of wiggle room on negotiating. Corporate relocation and I suspect the company will end up buying them out.
mmcmonster
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Re: Deja Vu.. are there too many houses for sale?

Post by mmcmonster »

prudent wrote:[...]Anything under $250K that is in decent shape and not overpriced is gone in a few days.
I think you're hitting they key here.

The economy is doing a bit better but people don't believe they'll be able to pay off a $1M mortgage. So they buy what they can afford. A lot more low-cost houses.

Seeing this in my area (north-east Pennsylvania). The market is hot in lower cost neighborhoods and it's putting downward price pressure in the upper scale neighborhoods.
snowman
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Re: Deja Vu.. are there too many houses for sale?

Post by snowman »

mmcmonster wrote:
prudent wrote:[...]Anything under $250K that is in decent shape and not overpriced is gone in a few days.
I think you're hitting they key here.

The economy is doing a bit better but people don't believe they'll be able to pay off a $1M mortgage. So they buy what they can afford. A lot more low-cost houses.

Seeing this in my area (north-east Pennsylvania). The market is hot in lower cost neighborhoods and it's putting downward price pressure in the upper scale neighborhoods.
Same here in Denver metro. The lower end is very hot, but in our 500-650K neighborhood of maybe 1K homes, the houses tend to sit on the market for 2-3 months, finally selling at a discount. It seems to make sense - even though existing inventory is low, there is so much new construction in our town it greatly exceeds the 2004-2007 building boom!
MoonOrb
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Re: Deja Vu.. are there too many houses for sale?

Post by MoonOrb »

Frisco Kid wrote:MoonOrb, sounds like the Bay Area! 40% over asking and losing the deal almost defies logic. What area are you referring to?
Seattle.
Grt2bOutdoors
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Re: Deja Vu.. are there too many houses for sale?

Post by Grt2bOutdoors »

There are a number of homes for sale in my vicinity. The ones in move-in condition are selling, the ones where the lawn is not maintained, they're in general disrepair are just......sitting. On the other hand, new homes built on spec are selling. A number of prospective buyers are putting less than 20% down. Lots more multi family being built - lots of folks lack financial wherewithal to buy, so they rent. You call that a sign of a robust market? It is more orderly, banks are still cautious with lending. Here's another potential fly in the ointment - adjustable rates use what underlying index? Well, now there is talk of the index being used will change in about 4 years. How will this affect the adjustable rate mortgages? But a subprime market like 2007? - no way!
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
flyingaway
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Re: Deja Vu.. are there too many houses for sale?

Post by flyingaway »

I see many signs with independent new realtor names.
mmcmonster
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Re: Deja Vu.. are there too many houses for sale?

Post by mmcmonster »

flyingaway wrote:I see many signs with independent new realtor names.
Meaning more people are getting into realty because the license is relatively easy to get and they have no other good job opportunities? Scary.
simmias
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Re: Deja Vu.. are there too many houses for sale?

Post by simmias »

I didn't realize there were so many Charlotte bogleheads here.

Anything under $300k sells almost immediately here, while inventory priced higher than that sits longer. Prices are climbing due to our low inventory. In the city we're at like 1.5 months of inventory.

Builders are only getting financing for high-end for the most part, and there are not too many more places to build in the city. A lot of the construction is tear downs, sometimes with two houses going on the lot where one was originally.

Home prices are climbing pretty quickly here due to the inventory shortage. And it's even worse for renters. Our city's still pretty affordable relatively speaking, but I could see it not being so in a few years. We've been seeing prices climb 7-10% a year.
devans0
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Re: Deja Vu.. are there too many houses for sale?

Post by devans0 »

Midwesterner here. Our past realtor is sending out property value estimates to all of her clients. She is being proactive on trying to get a supply of listing at mid price levels. Supply is tight, I hear of many learning the hard way to be pre-approved, houses are selling that quickly. My guess is that low rates and an aged market cycle is driving some of the frenzy. Builders have concentrated on high end/high profit homes creating a glut at luxery priced homes.
kjvmartin
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Re: Deja Vu.. are there too many houses for sale?

Post by kjvmartin »

Trying to buy a house is like a full time job around here...

Last one I looked at, we scheduled a showing. The seller cancelled all showings due to overwhelming demand in favor of an open house for 2 hours the coming Saturday.

So, off we went. We parked a few blocks away. The house, on a normal residential side street, was inundated with traffic. It reminded me of a stadium letting out. There was a line around the exterior of the house of people waiting to get in and the house was overrun with people to the point I couldn't get a good look/feel for it. It went on contract that day for well over asking

kjvm
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