House prices surpass housing-bubble peak on price-to-rent ratio
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Re: House prices surpass housing-bubble peak on price-to-rent ratio
#2Houses are way over valued right now due to the lumber shortage and then are selling for inflated values on top of that due to demand following the pandemic. My house, according to Zillow, has increased in value over 20% since the start of the year and I could likely raise the selling price by another 10% if I were to put it on the market.
Re: House prices surpass housing-bubble peak on price-to-rent ratio
#3Houses are way over valued right now due to the lumber shortage and then are selling for inflated values on top of that due to demand following the pandemic. My house, according to Zillow, has increased in value over 20% since the start of the year and I could likely raise the selling price by another 10% if I were to put it on the market.
While I am sure that is one of the factors in house prices, the main driving factor is very low interest rates and massive amounts of credit.
Re: House prices surpass housing-bubble peak on price-to-rent ratio
#4Houses are way over valued right now due to the lumber shortage and then are selling for inflated values on top of that due to demand following the pandemic. My house, according to Zillow, has increased in value over 20% since the start of the year and I could likely raise the selling price by another 10% if I were to put it on the market.
While I am sure that is one of the factors in house prices, the main driving factor is very low interest rates and massive amounts of credit.
Both of those were true pre-COVID and houses prices were not going up nearly as fast as they are now. People staying in their houses makes them actually pay attention to where they're living. Some end up wanting to renovate and some people just want to move.
It's a high demand low supply time so prices increase and interest rates don't have much to do with that.
Re: House prices surpass housing-bubble peak on price-to-rent ratio
#5Houses are way over valued right now due to the lumber shortage and then are selling for inflated values on top of that due to demand following the pandemic. My house, according to Zillow, has increased in value over 20% since the start of the year and I could likely raise the selling price by another 10% if I were to put it on the market.
While I am sure that is one of the factors in house prices, the main driving factor is very low interest rates and massive amounts of credit.
> the main driving factor is very low interest rates and massive amounts of credit.
This doesn't tell the whole story. Low interest rates don't make people offer 150k over asking while waiving all contingencies. I'm closing on a home soon and I saw this kind of stuff. I myself went 25k over with all contingencies waived on a condo in a 100 year old multifamily building. Relatively speaking, I was quite lucky to get this condo for this cheap.
There's a legitimate demand here: people, like myself, who renewed a lease on a tiny apartment shortly after the pandemic started then spent a miserable year indoors. Informing each other of your meeting schedule so you aren't loud in the kitchen while your partner is presenting in a meeting. Wishing your relaxation space wasn't the same as your work space.
I'm now roughly doubling the square footage of my living space, adding a garden and a patio. I'm thrilled. And yeah, I'm paying a million bucks for it.
Re: House prices surpass housing-bubble peak on price-to-rent ratio
#6Houses are way over valued right now due to the lumber shortage and then are selling for inflated values on top of that due to demand following the pandemic. My house, according to Zillow, has increased in value over 20% since the start of the year and I could likely raise the selling price by another 10% if I were to put it on the market.
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Re: House prices surpass housing-bubble peak on price-to-rent ratio
#7Earlier quoted context omitted.
While I am sure that is one of the factors in house prices, the main driving factor is very low interest rates and massive amounts of credit.
> the main driving factor is very low interest rates and massive amounts of credit. This doesn't tell the whole story. Low interest rates don't make people offer 150k over asking while waiving all contingencies. I'm closing on a home soon and I saw this kind of stuff. I myself went 25k over with all contingencies waived on a condo in a 100 year old multifamily building. Relatively speaking, I was quite lucky to get t…
> Low interest rates don't make people offer 150k over asking while waiving all contingencies
Paying above offer always struck me as strange. In my housing market its very common as well, to the point I believe under-pricing the home is intentional. There's no reason the home should be priced considerably below the market price. Sometimes you get it wrong but homes consistently selling above ask tells you the sellers are under-pricing intentionally. The upside for the seller is that bidders enter blind bids where the top bidder could bid significantly higher than the next highest bid.
I think systematic under-pricing could happen when prices increase a lot in a short period and it takes the brokers a while to adjust their pricing as the trend becomes more clear. But it could also be cultural to a market where brokers feel comfortable under-pricing homes to encourage a bidding war, but that obviously doesn't work in all markets.
As for waving contingencies, that's just another form of incentive in lieu of cash.
Re: House prices surpass housing-bubble peak on price-to-rent ratio
#8Houses are way over valued right now due to the lumber shortage and then are selling for inflated values on top of that due to demand following the pandemic. My house, according to Zillow, has increased in value over 20% since the start of the year and I could likely raise the selling price by another 10% if I were to put it on the market.
While I am sure that is one of the factors in house prices, the main driving factor is very low interest rates and massive amounts of credit.
Don't forget the moratoriums on evictions and foreclosures.
Re: House prices surpass housing-bubble peak on price-to-rent ratio
#9Houses are way over valued right now due to the lumber shortage and then are selling for inflated values on top of that due to demand following the pandemic. My house, according to Zillow, has increased in value over 20% since the start of the year and I could likely raise the selling price by another 10% if I were to put it on the market.
[deleted]
My house is not on the market, so at the moment it is priceless.
Re: House prices surpass housing-bubble peak on price-to-rent ratio
#10Earlier quoted context omitted.
> the main driving factor is very low interest rates and massive amounts of credit. This doesn't tell the whole story. Low interest rates don't make people offer 150k over asking while waiving all contingencies. I'm closing on a home soon and I saw this kind of stuff. I myself went 25k over with all contingencies waived on a condo in a 100 year old multifamily building. Relatively speaking, I was quite lucky to get t…
> Low interest rates don't make people offer 150k over asking while waiving all contingencies Paying above offer always struck me as strange. In my housing market its very common as well, to the point I believe under-pricing the home is intentional. There's no reason the home should be priced considerably below the market price. Sometimes you get it wrong but homes consistently selling above ask tells you the sellers…
> There's no reason the home should be priced considerably below the market price.
Partially because you comp against recent sales in the area to determine market rate, it takes a while to close so the comps you have available are usually a few months old, and the price moved a lot in a few months
This happened to me multiple times. Recent sales as late as January suggested X could win this house, I put in an offer at X+15, I'm later contacted that there's an offer at X+50 and I can put another bid in if I want to one up them
Of course in this example X is already over asking so you're right I think that this is done intentionally.