I bought my house from my best fiend. He’d owned it for two years and made a 50% profit. Out of curiosity I asked my realtor a few months ago, after less than two years of ownership, how much my house was worth. Sight-unseen since I bought it (he previously also handled the sale when my friend bought it) he estimated almost double my purchase price. What’s it worth now? A friend said more than twice what I paid for it.
The County Assessor came by a few weeks ago, and he told me that a 400 sq. ft. cabin up the street sold for $90,000. My friend who just sold his tiny (like 700 sq. ft.) two-bedroom house paid $67,000 for it and sold it for $133,000. A guy bought a house behind him (with a view of the bay) for $90,000. Someone offered him $350,000 just for the lot. (He declined, and is building a two-storey house for a cost of $165,000 after demolishing the original cabin.)
Certainly the bubble will burst eventually. But I think that prices here will just level off, rather than drop. My place is on a full lot (many lots here were split and there are one or two cabins on each half-lot), is on a hill (no flooding, like many places right across from the beach), has three bedrooms, is close to the beach (a ‘short block’ down the hill), and I’ve slowly been making improvements.
I don’t want to sell. Even if I move back to L.A. I want to keep the house up here. But if I do sell, I think I’ll do all right. They’re just not making any more seaside property around here.
The property market in Dublin though is a little nuts. I own two houses on the northside of the city and I know I could sell either one within a couple of weeks. The Dublin property market is akin to San Francicso’s with even more urgency.
Things are a little slower here in Chicago with an audible hiss in the RE market.
I live in lovely Hayward, in my home now for nine years. When we bought it, 1997, we actually got to deal down to our price, which was $150,500. It’s a single-story 1220 sf 2bd/1b house. My childhood BF bought a similar house down the street about 4 years ago for $308K and I remember being amazed someone would pay so much for such a shitty house/neighborhood.
FF to now. Shitty house/neighborhood would probably go for $550K. Un-fuckin-believable. Only problem is, yeah, I could sell and clear $400K after paying everything and everyone but another house that I’d move up to would cost $750K. What a pain in the ass. I don’t want another fucking loan at 40.
We’re gonna sit for another year or two. I predict the housing market will fall somewhat in the near future (as do many evaluators and yes, I know I’ll suffer somewhat in not having gotten all that falling money in selling now) and I’m gonna laugh my ass off at my pompous BIL who bought a “starter” in Castro Valley for $550K two years ago and will hopefully (shame on me, but I don’t like him!) lose his ass. Pompous fool. That’s a whole 'nother kettle of beans/pit thread.
I don’t know where you are, but I’m wondering why you think that. I hear things like that from those in the real estate industry, but they’re strongly counterindicated by the surge in interest-only and adjustable rate mortages made in the past few years.
In the past, the housing market tended not to drop precipitously because, even if the prices dropped a bit, most people were in fixed rate mortages. They couldn’t sell for a profit, but they could just keep living where they were. That’s no longer the case. When those 3/5/7 year ARMs start to run out and hit payments that, with interest rates on the rise, could easily be double what they were before, people will have to sell, which will drive the market way down.
At least, I hope it will. Then maybe I could afford a house ;).
I feel your pain. I was looking for two years in Toronto before buying. The bidding wars here are (or were) just obscene - I routinely got my ass spanked, being outbid by $80,000 - $100,000 or more on properties “priced” in the mid-$500,000 range … the tactic was to deliberately underprice, stir up an auction, and get panic buying. After being outbid numerous times, it sometimes seemed that this was the only way to actually get a house …
Don’t give in - just keep on looking. We did, and eventually bought at a reasonable price.
The fact that these guys could not get any bites is a pretty good sign.
There were a record number of foreclosures last month (according to the Cincinnati Enquirer) and that number will surely rise as interest rates rise. A lot of people took out ARMs, which were very affordable in the short term. The 1-3 year introductory window is starting to lapse and soon homeowners will be facing a mortgage they can’t afford.
And remember, last year 40% of new mortgages were taken out by investors last year. Just as the day traders were run out of business in the late 90’s when the stock market tanked, a lot of investors are going to be run out of the investment property business when the housing bubble bursts.
I’d say that the OPer is absolutely correct to avoid getting suckered into paying above asking price. IMO, it’ll be a buyer’s market in the very near future.
This is about where we are, too. We bought a fairly good condition fixer-upper 2 1/2 years ago, before Calgary’s RE market went through the roof, and we would get anywhere from 30-40% higher than we paid for it already. But, we have a nice, low mortgage, at a nice, low interest rate - we cash this house in, and get into what? A mortgage that’s double what we’re paying now, for not much more house?
Let me add my voice to the chorus saying offer what you’re comfortable with, not what salespeople are trying to entice you into. You’ll be paying the mortgage, not them. And use the internet to watch your local houses. We knew when we were negotiating for this place that it had indeed sat on the market for about six months, and had dropped in price twice already.
It takes two parties to agree on a contract, no matter how frivolous or remorseful one party may be or become. What you are saying is that one party should not be allowed to retract or revise an offer before it is signed by the other.
However, if an agent is involved, at least in my state, if the agent brings a qualified, ready buyer to the table, one who essentially agrees to the terms offered, a commission is due whether or not the sale actually happens. As an agent, I don’t really care if the property sells, but if I earned my commission, I deserve to be paid.
Things have cooled somewhat in southern Maryland. When we bought (not quite 2 years ago) prices were starting to shoot way up, and bidding wars were becoming common. It was almost impossible to find anything nice (with more than an acre) for under $200K. Before you offer false sympathy, this is a rural county over an hour from DC, so it’s mainly a long-commute bedroom community.
We looked at a number of places, including some condos. I was bound and determined that I would not live under a Home Owner’s Association ever again. When we found our house, it was within days of going on the market. We offered the full asking price, but we required an answer within 24 hours. The sellers accepted that very day, asking only for a delayed closing, since the house they were building in Florida wouldn’t be ready when we wanted to settle. No big for us, and it all worked out.
Within a year, houses on our street were going for nearly $100K more than we paid, and even higher on the parallel street. So my worries about not bartering for this place were allayed pretty fast. We have no intention of selling until our daughter has to wheel us into a nursing home, but it’s nice to know we have equity available, just in case… After 22 years and 7 houses, we’ve finally done well in buying.
Thing is, the real difference is cost between areas is not the cost of the HOUSE, it is the cost of the LAND. I recall several years ago (10, maybe?) our plumber was telling me he just did some work on a house in the next town over. The new owners paid 950K. 2 days later, the bulldozers came in. Leveled the place. The new house is not much bigger, if any, but the old one was in sorry shape. But it’s a nice neighborhood. A decrepit old house in a nice area can easy go a million in the NY area. Then the house gets dropped.
I bought my first home a little over a year ago, and I have to say that the entire process totally sucked ass - from looking at houses (and looking and looking and looking and aaagh!) to dealing with the nation’s only mentally retarded mortgage officer…
And I think I’ll be doing it again in 2 or 3 years.
Out of curiosity, what’s the purpose of a reserve? Sure, you put it right up there for all of us to see…but then why have a minimum bid? Is it strictly so you can get a true-to-life value on your home?
Our experience is similar. We bought in Fremont 10 years ago, and got the price cut $40 k to $350. (5 bdroom house, 2100 sq ft.) Course it helped that the dopey sellers started rennovating after they listed the house, so it sat there for months before we got there.
From what I read, there is a game of chicken going on now, with buyers trying to come in low and sellers trying to wait for spring when the market picks up, and not taking lower offers. If the high offers don’t come in, they’ll have to take lower, so it might be good to wait a few months.
As for me, I’m not budging until I retire. Then I can move to East Hicksville, where I can buy a house for the price of my garage and live on the difference.
