Bubbles

I got an e-mail from a client today who said:

“Reading your posts as of late, it sounds like we’re in a bit of a bubble.”

That’s not the first time I’ve heard this lately. The question is, how long will this bubble last? I personally think it’s going to last awhile. Here’s why:

1. Lots of folks have obviously been sitting on the fence for the last few years. Those folks have been saving money.

2. Population in this area isn’t declining

3. There’s still a finite amount of housing and buildable land around here.

4. The inventory is hilariously, preposterously low

5. The buyers in this market are all well qualified, out of 15 buyers I’ve worked with so far this year only one has less than 20% down.

6. As I see it, we’ll need inventory to at least triple to make a dent in this demand…I’m not sure that’s coming.

7. The major media hasn’t discovered this story yet, when that happens I predict more buyers enter the marketplace (more sellers too!)

Case in point, and this is kind of scary too. The 3 bedroom house at 685 Pilgrim looked at offers today. The most money ever spent on this floorplan was $900,000. This house is listed for $888,000. 685 Pilgrim needs a roof. The same floorplan in far worse condition sold for $775,000 last November. This afternoon they got 10 offers…undoubtedly it went over the all time high. What happens when the next 3 or 4 bedroom rancher comes on the market that doesn’t need a roof? I’m thinking it’s likely it’ll be priced higher than 685 Pilgrim.

I really don’t expect this “bubble” to burst this year. Whatever the case…it sure is a wild ride we’re on!

Comments

  1. You forgot to add that the rates are still low.

  2. Too bad we can’t verify any of the multiple bids. Amazing how secret this Ponzi scheme they call the national housing market has become, especially in a down market.

  3. Jim Minkey says:

    Earth to Renter…this is about as far from a down market as there possibly has been. Who cares what the “national” housing market is like anyway? I’m concerned about the activity in THIS market, aren’t you? Congratulations though on steadfastly clinging to the past. As for your appeal for more transparency, maybe an open auction would be more appealing, but it certainly has some flaws as well…like making terms unified at the outset and only bidding on the dollars. I guess I’m unclear as to what you would want to verify on these bids anyway? You want to know what everybody elses offer is so you can go higher? Maybe an auction is better…but it would probably make prices go even higher.

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