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hanera
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2012 Apr 17, 11:45am
What the heck is going on? I have not seen a frenzy like this since the peak of the bubble in '05. Realtors are citing the "Facebook effect" and "google Effect", but I don't buy that, since that can't apply to such a large geographic region.
I'm asking the same question too. My real estate agent told me that inventory is low because sellers think house prices have bottomed and are holding for better prices. House prices could have bottomed since unemployment rate is declining and stock market is buoyant, S&P is pretty near previous ATH.
bmwman91
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2012 Apr 17, 11:51am
I have heard the same things from a number of friends and family. It is sort of a weird social feedback loop. Inventories are super low, and demand is about the same as ever. So, that means that there will be multiple interested parties for given properties. Well, word of that starts getting out, and people that thought that they would wait start freaking out and thinking, "OMG the market is reigniting and I need to get in NOW!" So, they go and start trying to make a rush purchase to, "get in while they can." This gets out to more people, who do the same thing, and so on.
By this time next year, I assume that this will not be the case any longer. Inventories are ridiculously low because a lot of people that are underwater are waiting to see if the government doles out free money (loan mods, principal reductions). It is an election year, so expect a full set of shenanigans from the candidates, aimed at buying votes from this large group of people. After the election, it'll be forgotten. There are likely other reasons for the low inventories, but I am blanking on them. Perhaps there are a lot of wishful thinkers out there that think Facebookers will be eager to overpay for their unremarkable wooden box. There are far more of those wishful sellers out there than FB folks with the cash and low enough intellect to grossly overpay, though.
If the market is still nutty by this time next year, and prices are rising for some reason, that is still no reason to buy. Even IF the, "buy now or be priced out forever" BS was true, it would be stupid to overpay for a house now. If the value goes up wildly in a year, you could sell...but everything else went up wildly too and you will end up with just as much debt, or more. The whole system is a huge scam, designed to rob people of their money and happiness.
So, things will either look better next year, or this place will just continue to make less and less sense for middle class families. I am hoping for the former, but there are enough monied fools here that the latter might be reality.
bubblesitter
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2012 Apr 17, 12:23pm
If buying is too expensive then why not just keep renting? I don't understand your logic of not being able to buy. Super low inventory is the main reason for the still holding BA prices - or as some people here thinks,it is the newly monied Chinese. I am sorry,if you are not a Chinese cuz that is the new qualification to buy in BA. :)
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I'm a happy long-term renter, but my fiance and I just saw a house in Sunnyvale, quite randomly, that we'd like to live in. The price is ludicrous, but we can afford the down payment and loan, so we thought we'd bid, since renting something comparable is maybe only 20% cheaper per month.
Houses sell in less than a week in most parts of Mountain View, Sunnyvale, Cupertino, etc. Often, they sell without even going on the market, or sight unseen by buyers, sometimes with no contingencies! Getting a couple dozen offers isn't uncommon on a nice house, and even horrible housing next to dumpsters goes over list.
What the heck is going on? I have not seen a frenzy like this since the peak of the bubble in '05. Realtors are citing the "Facebook effect" and "google Effect", but I don't buy that, since that can't apply to such a large geographic region.
#housing