Pipe Dreams

Over the weekend I met a really bright and articulate guy who wanted to buy a house in Foster City. I explained how the market is here and how the low inventory is a really big problem. he decided not to enter this insanity right now and will wait 6 months or a year to see how it all looks then. In an e-mail, he said he was “not in a hurry to move and I don’t want to get into a bidding war”. I sure get that! Who wants to get into a bidding war? Here’s the problem…unless you’re REALLY lucky you’re going to inevitably getting into a bidding war. In fact I can’t imagine how almost every buyer won’t get into a bidding war this year. Inventory is going to have to grow quintuple for multiple offers to abate…and I’d bet that even in that eventuality it won’t really matter…the good houses will STILL get multiples.

Oh sure, there’s a couple of houses on the market right now that have been on seemingly forever, but they have significant issues that effect their sale. Price and location to name a few. Almost every house will experience large demand as they come up if you ask me. It made me think about those statistics I wrote about last week…there have been VERY few times in the last 22 years since I’ve been doing this that there hasn’t been multiple offers around here. Really. When I first began in 1990 it was slow following the earthquake and then there was the first Gulf War. The early 90’s were pretty slow, and I was also pretty slow because I was new. I couldn’t tell a hot market from a slow one to be honest because I didn’t have any clients. In the mid 90’s though (after I did manage to find folks to work with!) I clearly recall sitting in somebody’s office waiting to present my clients offer amongst a throng of agents. It was that way until right after 9/11 in 2001 and the market came to a screeching halt. Depending on your perspective that halt only lasted until January of 2002 when it took off like a rocket again. Funny huh, for 3 months there was no competition at all because nobody made any offers and then they all jumped aboard again! That binge lasted until Sept 2008 and was followed by the slowest time I remember. Actually 2010 was pretty darn active too and even in the slowest times before that the really good houses got multiple offers.

I guess my point is that unless you’re spectacularly lucky the odds are WAY in favor of you competing. It’s sort of a bite the bullet thing. I bought 2 houses in multiple offer environments in 1999 and 2004. I wish it wasn’t this way…but it is.

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