Houses are on the market for weeks if not days, garnering multiple offers, and going over list price. I have been out bid on a few homes, as well as just not being able to move fast enough. I am seeing this crazy level of demand for SFH as well as investment properties.
I know lots of you HCOL folks have been dealing with this for a while, but what the heck is going on? I price a house as high as I can in terms of my comfort level, the numbers, and what my gut tells it is worth, properties are still going well north of that. My hypothesis is the fear of raising rates has temporarily and drastically driven up demand. Supply has not had a chance to adjust yet, so prices are increasing rapidly.
Does anyone have any stories about when they knew it was time to get out the last time?
What are my fellow Mustachians doing? Continuing to invest in real estate and primary residences or are you holding back, hoarding cash and waiting for things to cool off?
So, I bought in 2004 and I'd say FINALLY the last 6 months, my house is worth what I paid for it.
At the bottom of the market in 2011, the house next door sold for $500k.
At the peak in 2006, the other house next door sold for $869k.
So yeah, I'm not one to talk about how to time it. BUT. I've been following my local market for awhile now. Honestly, I would not get in right now because prices have been going up so quickly.
There was a time a few years ago when the market was finally picking up again. my officemate was looking to buy, but his requirements were: 1. a 3 BR, and 2. under $700k.
That's a tall order in this town. He was outbid 9 times and then kind of took a break.
Then a house came on the market. The owners had one time to view the house, at 10 am on a Thurs. They went, liked it, bid full price, and got it. At $650k. It's now worth about $900k (please ignore the crazy HCOL numbers.)
My point is this: if you have been watching the market, and it seems too good to be true...it might be. I can't speak for your location, but here - at these numbers - the local jobs economy does not really support regular people buying a house. And we AREN'T the SF bay area. It doesn't mean there aren't outside investors or people buying vacation homes.