Suburban Sacramento Home Receives 122 Offers in One Weekend, Sells in 3 Hours

[SteveD]

Originally Posted by dimondpark

Closer to home...


https://sanfrancisco.cbslocal.com/20...ing-29-offers/

A 3/2 2,400 SF for $2.3 million. Damn.

[Crawford]

My brother, who lives in a upper-middle class sprawlburb of Detroit, had a neighbor's home sell in two days, over a dozen offers above asking, the accepted offer was all cash/no contingencies and about 15% over asking.

So, yeah, if the no-growth Rustbelt is seeing this, I can imagine places like Phoenix are going crazy right now. And this will probably end very badly, yet again.

Even urban areas seem to be getting into the frenzy. Brooklyn's March sales figures smash every historical record. I sorta get it in urban areas, because everything was dead for months and urbanites were in a holding pattern, but in sprawly places this has been going on for a while.

[Steely Dan]

Originally Posted by Nomad9

This shit is depressing as someone who’s finally in a position to buy a first home. I live in Alabama and even here the market is pretty distorted.

i'm not a real estate/finance expert, but i'd stay out of this current feeding frenzy and wait to buy a home if i were you.

keep renting for the moment and clean-up on the back-end of the coming correction.



i say this as someone who bought his first condo in 2007 (near peak).

and whose wife bought her first condo in 2009 (after the crash).

she CLEANED UP. i was underwater for the better part of decade.

[Nomad9]

Originally Posted by SteveD

where in Alabama? We're trying to build in Elmore County on family land. Closest anything is Wetumpka. About 1/3 of the way between Montgomery and Birmingham.

Birmingham. Looking at Zillow, there are some relatively reasonable options in the metro, but I think a lot of them end up in bidding wars/going fast. I’ve just resigned myself to renting until the market returns to some level of sanity....if it ever does.

[JManc]

I think the era of rock bottom interest rates will be over soon as the economy recovers. Once that happens, it will become more of a buyer's market.

[Nomad9]

Originally Posted by Steely Dan

i'm not a real estate/finance expert, but i'd stay out of this current feeding frenzy and wait to buy a home if i were you.

keep renting for the moment and clean-up on the back-end of the coming correction.



i say this as someone who bought his first condo in 2007 (near peak).

and whose wife bought her first condo in 2009 (after the crash).

she CLEANED UP. i was underwater for the better part of decade.

Replied to the other poster before seeing this, but yeah, I’m staying out for now. I don’t expect prices to burst/crash like the late 2000s, but I’d at least like everything to stabilize before jumping in.

[SteveD]

Originally Posted by Crawford

My brother, who lives in a upper-middle class sprawlburb of Detroit, had a neighbor's home sell in two days, over a dozen offers above asking, the accepted offer was all cash/no contingencies and about 15% over asking.

So, yeah, if the no-growth Rustbelt is seeing this, I can imagine places like Phoenix are going crazy right now. And this will probably end very badly, yet again.

Even urban areas seem to be getting into the frenzy. Brooklyn's March sales figures smash every historical record. I sorta get it in urban areas, because everything was dead for months and urbanites were in a holding pattern, but in sprawly places this has been going on for a while.

The market dynamics that produced the housing crash of 07/08 aren't in play now. That crisis was the result of speculative mortgage-backed securities crashing. Today prices are being driven by a historical under-supply of available housing and at least at the moment there's no end in sight for it. People are staying in their homes longer, millions of people are making a transition to working from home either permanently or part-time, and people who want to move, either to upsize or downsize, like myself, are somewhat frozen in place because we can't find anything to move TO.

[Steely Dan]

Originally Posted by Nomad9

Replied to the other poster before seeing this, but yeah, I’m staying out for now. I don’t expect prices to burst/crash like the late 2000s, but I’d at least like everything to stabilize before jumping in.

that's wise, IMO.

you don't necessarily need a cataclysmic crash like 2008, but even just waiting out the market to a point when you don't have to go up against dozens of other instant-bidders, and put up 10% or 20% or more above asking just to "win", is probably smart.

[Crawford]

Originally Posted by SteveD

The market dynamics that produced the housing crash of 07/08 aren't in play now. That crisis was the result of speculative mortgage-backed securities crashing.

Yeah, that's what everyone is saying now. And in 2008 everyone was saying it wasn't the same as the previous dot-com-era crash.

If home prices are trending far out of wack with incomes/wealth, there will be a correction. I know people are buying zero down homes again, they're marketing 50 year mortgages, and these are terrible signs. I wouldn't buy right now unless you have to buy.

[Buckeye Native 001]

Originally Posted by SteveD

The market dynamics that produced the housing crash of 07/08 aren't in play now. That crisis was the result of speculative mortgage-backed securities crashing. Today prices are being driven by a historical under-supply of available housing and at least at the moment there's no end in sight for it. People are staying in their homes longer, millions of people are making a transition to working from home either permanently or part-time, and people who want to move, either to upsize or downsize, like myself, are somewhat frozen in place because we can't find anything to move TO.

I keep hearing about building supply shortages, especially lumber, being a factor as well?

[SteveD]

Originally Posted by Buckeye Native 001

I keep hearing about building supply shortages, especially lumber, being a factor as well?

yes, I know that's the case here in Atlanta...lumber prices are through the roof right now...like triple what they were pre COVID.

[Buckeye Native 001]

Ditto in Flagstaff, which is ironic considering this town's primary economic driver for decades was lumber mills.

[badrunner]

This is the new normal in American cities. You want to live cheap? You can still buy land at $1k per acre even in CA or CO. Or buy a $100k house in a secondary city in the Rustbelt or the South. Lots of options out there but everyone wants to pile into the few desirable cities. Eventually the market will reach a new equilibrium.

[Crawford]

Why would high lumber costs drive up the cost of existing housing?

[homebucket]

Originally Posted by dimondpark

hence why so many locals are opting to move to Sac...


https://sanfrancisco.cbslocal.com/20...ing-29-offers/

Not too surprising. The house itself is on the smaller size relative to its price but the views cannot be matched elsewhere in the country. The house was obviously listed way below its actual value to gain more interest.

https://goo.gl/maps/fFrorCqkCHnLgWoc6

[Pedestrian]

Originally Posted by Crawford

Why would high lumber costs drive up the cost of existing housing?

Because that's the way the market works. High new car prices drive up the value of used cars too.

If you want a house, you have 2 alternatives: A new one or an existing one. The more expensive new ones get, the more people think their existing ones are worth and the more they ask for them, knowing a new one is less competitive in price. And buyers also know that their alternative is getting more expensive so they accept they have to pay more for an existing one. Especially when there's a shortage of new and existing inventory like now, to refuse to pay what others will pay means you get no house.

[Crawford]

Originally Posted by Pedestrian

Because that's the way the market works. High new car prices drive up the value of used cars too.

Right, but that's because the share of new cars is a significant share of the overall car market. One of four vehicles is leased (and leased cars are always new), so the share of new/almost new vehicles has to be like 40%+

Lumber prices shouldn't have a major impact on the U.S. housing market, because new homes aren't a significant share of the overall market, and lumber isn't an important material for existing home renovations. How many SFH are there being built in the Bay Area right now relative to the overall market? Probably a tiny share.

[Camelback]

Existing houses on the market have undergone an extensive renovation. High raw material and labor costs along with profit margins large enough to justify the renovation in the first place are rolled into the listing price, driving prices up in the neighborhood for other listings.

[Pedestrian]

This is why we are in no way looking at 2007/2008 all over again:

Need a Mortgage Loan? Good Luck. Lenders Are Tightening Standards.
By Orla McCaffrey
April 2, 2021 5:30

The mortgage market is humming, but getting approved for a home loan is as difficult as it has been in years.

Mortgage credit availability, a measure of lenders’ willingness to issue mortgages, is near its lowest level since 2014, according to the Mortgage Bankers Association, or MBA.

The tight lending environment illustrates a growing cleavage in the mortgage market: More home loans are being made than almost ever before, but they are going almost exclusively to borrowers with pristine credit histories and sizable down payments. Borrowers with credit qualifications that fall just outside the stellar category are finding fewer lenders willing to approve their applications. A segment of borrowers who would have qualified for a home loan early last year are now out of luck, deemed too much of a credit risk.

“Because mortgage credit is more difficult to obtain, it is a more competitive environment overall,” said Dr. Lawrence Yun, chief economist at the National Association of Realtors.

About 70% of mortgages issued in 2020 went to borrowers with credit scores of at least 760, up from 61% in 2019, according to the Federal Reserve Bank of New York.

The median credit score of borrowers approved for mortgages reached 786 in the fourth quarter of 2020, up from 770 during the same period in 2019.

Americans who want to break into the housing market this spring face plenty of other challenges. Home prices tend to fall in a slowing economy, but they have jumped during the coronavirus pandemic, keeping many families out of homeownership.

Home prices are increasing at the fastest pace in 15 years, propelled by a record-low supply of homes for sale and a flood of well-off workers looking for second homes or space for home offices. The median existing-home price topped $300,000 last summer and has stayed there . . . .

https://www.wsj.com/articles/the-mor...=hp_lead_pos11

But wait for the politicians to start beating the drum that stringent lending criteria are discriminatory and racist and forcing lenders to loosen them for minority borrowers. Then we will start slipping back into troublesome territory.

[Kenmore]

bought my place for an lol amount in 2010, comps now are incredible

wouldn't touch this market with a 10' pole