WatchLong story short, I've been in the market over 8 years, sitting on the sidelines, being patient. Found a "dream" house, 3/2 1700sqft, nothing fancy, but i liked the layout and the yard and it had a sunroom. Comps would place it somewhere in the low $600k's. Asking was approx 20% above comps.
Mostly because it seemed like the perfect house and I'm so tired of house searching, especially with the artificially low inventory, we got an approved letter from our mortgage broker, waived our loan contingencies and offer FULL Asking the day after the first open house. We gave them 1 day to respond with clear instructions that we will not be resubmitting an offer as I don't want to play BS bidding wars/games.
The sellers agent couldn't even be bothered to even respond to the offer. Words cannot describe how much disdain I have for these worthless and unprofessional used car salesmen.
However if they're that confident it'll go over, then I'm 100% certain that this spring/summer is going to be another bubble.
Good luck to those buying!
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Scottsdale, AZ
It's absolutely deceptive. If they list it for purchase at price X, but are willing to take higher offers for a set amount of time, it should be noted. I'm all for buyers doing their homework, and while what's being done isn't illegal -- it should be. If you're not willing to sell it for price $XXX -- don't list a price.
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Los Angeles, CA
Lol at the concept that there was a brief 3-6 month window that was the effective bottom. All this crap we've been through for over a decade now, and people still stubbornly cling to the same old crappy false cliched beliefs.
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Menlo Park, CA
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ih8alameda2 says
Not a frenzy. Just normal realtor fraud and deception.
The asking price has little to do with what they'll accept. It was just a trick to get you to make some kind of investment in investigating their place.
The sellers and their realtor cheated you.
http://patrick.net/forum/?p=1211500
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The longer you wait the more you win in this market. Prices aren't going to be going up for a long time, even with all this artificial government force.
You are actually saving money by not buying anything. And just remind yourself that wealth is mobile, real estate is not.
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Ross, CA
robertoaribas says
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bmwman91 says
you assume rational, thoughtful people. if people remain irrational prices can easily stay at current levels.
group-think in the bay area is strong. it was especially evident at the peak of the bubble (almost no bears. today we have a nice balance of bears/bulls). and the home ownership at all costs mentality is a big part of the culture; especially among asians.
you'd think 6 years after a housing bust, with prices --still-- falling, people would be more careful about buying houses but this is not the case. people are still buying as much house, as fast as they can. the main difference today is lenders aren't giving loans to poor people; but i have no doubt if easy lending came back we'd be right back into a huge RE bubble. people haven't changed much, the lending is what has changed.
amazingly, i still get the "you better buy before you get priced out" speech despite prices falling for years. no. it'll take a decade or two before people change their mind - assuming the housing slump lasts that long.
things i have learned:
a) people are extremely irrational about certain things - housing being one of them.
there's a very strong emotional component which blinds good judgment. my suspicion is generations have been brought up with the idea housing is the best investment money can buy and 6 bear years isn't nearly enough to change this deeply ingrained perception.
people are slow to adapt.
b) lemming behavior always trumps rationality.
c) don't fight the mindless masses. you can't win.
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Mountain View, CA
bmwman91's website
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Hysteresis, your user name is a one-word summary of what seems to be going on with RE prices. I guess we'll need 20% minimum down payment requirements on all loans, and greatly diminished demand to knock the prices off of the upper end of this hysteresis curve.
I agree about the group-think stuff. Yeah, "buying a house" is one of those unquestioned dogmas in the US, and it is especially pervasive in the BA. Maybe that is because prices are so high and everyone is always on the subject. The fact that we do have a lot of 0- & 1st-gen Asians & Indians also adds to it a bit since that brings in some other cultural elements that fixate heavily on having a house.
Then yes, add to that the fact that people are generally incapable of rational thought & decision-making, and that a "house" has become a pie-in-the-sky emotional dream, and it gets nuttier. So you are right, you can't fight the idiot masses.
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Danville, CA
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rowemoore says
It's not religious, it's philosophical.
And no, I'm not gonna shut up and there's nothing you can do about it.
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Danville, CA
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rowemoore says
I'm here and I'm staying here and I'm not going to change and that's it.
Everything I've said is true. I see it on a daily basis.
It's not the United States of San Francisco!
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46 male
Menlo Park, CA
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You say their houses are unique. Really?
rowemoore says
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Danville, CA
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wthrfrk80 says
That's the first thing these people want to have you learn when you move here. Anyone who doesn't agree with the politically correct social agenda or who has standards is a hater. Anyone who wakes up on Sunday morning and goes to Mass is a hater. Anyone who voted for Prop 8 in California is a hater.
I don't buy it. I never did and I never will. If they want to be chronic rebels, that's fine. It's stupid and childish and counter productive but it's their business...until they make it MY business or until they start corrupting our institutions (which they're dying to do, that's part of the whole rebellion thing) or system of public education.
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People, it's EXTREMELY simple. There is only one question you need to ask yourself to answer the "should I buy now" question. Here it is:
Do you believe that the recession is over and the economy will grow from here?
If you answer yes, then you should buy a house as employment and wages will grow from here and house prices will stabilize and rise.
If you answer no, if you think the recession is not over and that the economy could falter from here then you should NOT buy a house. As someone up-thread mentioned, banks are being more picky today so potential borrowers must have real income in order to get a loan. If employment and wages drop from here then house prices WILL fall as people won't have the money to buy them.
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Danville, CA
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1sfrenter says
I don't have a problem with either scenario on its face but I don't like it when homosexuals want to raise children on the premise that homosexual "marriage" is normal when anyone with any common sense or semblance of a traditional value set knows it isn't.
Did you know the only reason homosexuality was no longer categorized as deviant in DSM III was because of threats of multiple lawsuits against the APA? It had nothing to do with science. It was all about politics and money and creeping political correctness, even in 1973.
Even with the passage of Prop 8 in California (which fifty percent of Evangelical blacks in LA County supported, that's why it passed), the lefties simply found a queer judge in San Francisco who was near retirement. This is how these people operate. There is no rule of law. It's a mob and there are certain ways to deal with a mob. We haven't gotten to that point yet. You'd better hope that we don't.
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There is a lot of overreaction on this site. We too are in the market and this is the first time we've gone house hunting. We've waited 12 years to buy and have saved up a lot of cash, have perfect credit, and good jobs. Yes- there is a shortage supply problem.
That said, I've talked with a lot of people lately and the general attitude is that yes, there's a shortage, but also because there are a lot of folks who bought in the bubble who can't sell or move up. There are also still a lot of foreclosures in the pipeline. The Realtor I talked with a few days ago said that something like 20% of the homes for sale in our area are foreclosures but many times that amount were in the process of going through default as we speak.
Is this the start of another bubble? Nope.
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Mountain View, CA
bmwman91's website
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It isn't a bubble. The mechanisms that fuel one are not present anymore. What it is, is a severely reduced supply of decent properties coupled with the typical high-demand of the Bay Area and RE investors. Lots of people see this & assume that it is somehow permanent, freak out, and push-up their plans to buy, thus exacerbating the problem. So, chock it up to transient market conditions and typical consumers' mass-hysteria.
WHEN inventories return to their normal levels, everything will calm down again. Prices aren't going to drop dramatically or anything, but it is silly to think that prices will do more than get a seasonal upward bump this year. It's a transient, fed off of historically-low inventories.
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tiny tina says
I've been on various housing bubble sites since 2004. I was on this one way back in the day and forgot what my username was and came back more recently in the last year or so. If there was anyone that should be skeptical of the real estate industry, it would be me. The experience I've had with realtors is like that of any other salesperson: There are agents who I've met and simply wanted me to buy something right away and then others who acted professionally. Prior to my current career I too was a salesperson. Albeit not a Realtor, but I got a commission for what I sold. I never sold anyone something they didn't need. If what they needed cost less than the nicer model, I suggested the less expensive model first. I never told anyone they had to buy this or that. Likewise if a Realtor starts feeding me lines of realtor-speak: " Its a grrreat time to buy!" etc etc, I immediately turn them down for business.
The large number of foreclosures in the system isn't really news. It was on NPR recently. There are still a ton of foreclosures coursing through the system. California is at the top of the list. A lot of the houses we've looked at- even in nicer areas- are foreclosures. So its not like he was telling me stuff I already didn't know.
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Menlo Park, CA
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hanera says
Legally, an advertised price is definitely an offer to sell under most conditions.
* toasters
* stocks
* cars
Why should real estate be any different?
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Mountain View, CA
bmwman91's website
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Maybe sellers in the east bay are envious of the silliness on the Peninsula and want a piece of that action? Perhaps you could say...they have peninsula envy?
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rowemoore says
I think that the term "bubble" is getting used too loosely by some. Folks in here seem to want to call any possible increase in pricing in the Bay Area a "bubble." I agree, the mechanisms that led to the big bubble here are no longer present (free liar loans). However, the market is heavily manipulated by both public & private interests and we currently have an order of magnitude more demand than supply. Couple that with people that let their emotions drive the largest financial decision in their lives, along with a temporary glut of money coming from a pumped up stock market & a few IPOs, and you get what we have: a frenzy over the few available houses and bidding wars. It's stupid, but it isn't a bubble.
The Bay Area really is the perfect storm of idiocy & money needed to make the place totally unreasonable for middle and upper-middle class folks that want to have disposable income & financial security after borrowing for a house.
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bmwman91 says
Agree. Seems like there's a bubble in calling everything a bubble.