It's a Seller's Market/Purchasing a Home Perspective

[Buzz2401]

Have a friend trying to buy.  They have been bidding 10% over asking and still getting out bid.  They just offered 460K for a house listed at $400k yesterday, not sure if they got it.  My opinion for anyone looking to buy right now is to save your money, this housing bubble is gonna crash.

[vandeman17]

We have people who want to buy our house and it’s not even listed. They have been looking since last year, made multiple offers over asking and didn’t win any of them.

[Bareback]

Good advice on buying but don’t overlook a Refi. If you can reduce your rate by a point the payback can be a year or two, If you can drop more than a point your smiling, and if you can go from a 30 yr to 15 yr with close to the same payment your laughing.

Contact Pianoman and see if he can help.

[Mudman]

I have been in Construction for um 27 years now, man I getting old.  Im telling ya all to slow your roll.  Be carefull.  Crash is coming in next 2 years.  House will be much cheaper.   Buy low, sell high.  I sure as hell wouldnt buy now.

[fly-by]

I laugh when I hear about how we don't have inflation yet.  Shop for a house, boat, car, bullets, canning stuff, sausage making stuff, aka any stuff and I have a hard time seeing that we aren't in a high inflation period now.

For the average Joe, their house is the best and most significant investment they will ever make.

So true. Official measures of inflation are a joke.  The weighting assigned to housing is low yet it's the largest expense for most families. Additionally, changes in the basket based on consumer behavior haven't shown up yet
https://www.bls.gov/cpi/questions-and-answers.htm#Question_2
'"There is a time lag between the expenditure survey and its use in the CPI. For example, CPI data in 2016 and 2017 was based on data collected from the Consumer Expenditure Surveys for 2013 and 2014."

[Stein]

I was surprised that even freezers have jumped in price and can be hard to find.  Just about everything has either some sort of supply issue or huge demand.  I pretty much don't trust most numbers anymore - inflation, unemployment, they have all been messed with so much in the last 20 years as to be somewhat meaningless, for sure meaningless if you are trying to compare now to the past.  It's like if we started counting field goals as 10 points and then talked about how the scores next year are the highest in recorded football history.

[Shoofly09]

A couple of long term "theorems" about housing that I think remain true...     They are in contrast, but I believe set a good range of what you should and shouldn't pay for a house:

* Buy the most expensive house you can afford.      This follows on all the previous comments that inflation is coming, and a home is a good way to protect yourself from rising prices.   This doesn't mean buy the most expensive house in your neighborhood.   This doesn't mean buying a house that is "over improved" for your market....

* Buy a house 3x your annual income.     So this is an old one, and many on here will argue its outdated, but we will revert to historical norms at some point.    Are houses overpriced due to low interest rates?    Maybe....


In the (very) long run, houses are depreciating assets.  If you own a home for 20, 30, 50 years, you will need to spend money to repair and make improvements.  If you are a short term speculator or investor, it doesn't matter.      The land value appreciates over time, the improvements depreciate over a long term unless you spend money on upkeep and improvements.   


People who can afford to buy/invest in a home as a primary residence will come out ahead in the long run.    Those who can't afford a down payment/buy a home will lose in the long run.

[arees]

A couple of long term "theorems" about housing that I think remain true...     They are in contrast, but I believe set a good range of what you should and shouldn't pay for a house:

* Buy the most expensive house you can afford.      This follows on all the previous comments that inflation is coming, and a home is a good way to protect yourself from rising prices.   This doesn't mean buy the most expensive house in your neighborhood.   This doesn't mean buying a house that is "over improved" for your market....

* Buy a house 3x your annual income.     So this is an old one, and many on here will argue its outdated, but we will revert to historical norms at some point.    Are houses overpriced due to low interest rates?    Maybe....


In the (very) long run, houses are depreciating assets.  If you own a home for 20, 30, 50 years, you will need to spend money to repair and make improvements.  If you are a short term speculator or investor, it doesn't matter.      The land value appreciates over time, the improvements depreciate over a long term unless you spend money on upkeep and improvements.   


People who can afford to buy/invest in a home as a primary residence will come out ahead in the long run.    Those who can't afford a down payment/buy a home will lose in the long run.

How about, "expect a drop when too many people are saying that house prices only go up."

[Miles]

Up or down, if you can rent it and cover your mortgage, buy it.  If people lose their homes, they will still need to rent. Keep enough in the bank for emergencies and you’re golden.  Look at home prices over the last 20-30 years.  Are they cheaper now?   No...   10 year cycles folks.  We are due, but if you’re always paranoid you’ll miss the boat every time.

*** edit: speaking to 2nd homes and investment properties only.

[Sandberm]

My wife and her first husband, on the council of her father in law, bought a house that she and him could barely afford with the theory that they would make more money as they got older and thus it would become affordable.

All that did was create a whole bunch of stress and monthly juggling of finances, and bitter fights about what to spend money on. Couple years later they were divorced.

I like to buy things that are easily affordable. I hate payments/debt. I do not like money stress.

[Buckhunter24]

We just put an offer 5% over list and will almost certainly not get it. Crazy market, might just continue to rent for a year unless something changes.

[Magnum_Willys]

We just put an offer 5% over list and will almost certainly not get it. Crazy market, might just continue to rent for a year unless something changes.

Be sure to look at your payments not price.  Buy a house now for $340k @ 3% interest = same $1432 payment as if you get it for $40k less next year but at @ 4% interest.  And you know interest will be going up over 4% and will you see that house at $300k again ?   

[Ironhead]

Housing markets may be at all time high but interest rates are extremely low.

[Buckhunter24]

We just put an offer 5% over list and will almost certainly not get it. Crazy market, might just continue to rent for a year unless something changes.

Be sure to look at your payments not price.  Buy a house now for $340k @ 3% interest = same $1432 payment as if you get it for $40k less next year but at @ 4% interest.  And you know interest will be going up over 4% and will you see that house at $300k again ?

Copy that  The house needs some work, and we offered right to the top of our budget.

[dc]

My wife and i sold our house last spring for more than we imagined we could.  We got offered full price minuets after the first couple looked at it.  We accepted  the offer and immediately told the couple that we would not accept another (higher) offer and it was theres and not to worry.   We know we left money on the table by not accepting more offers, but in my mind and the way i was raised is if you make a deal with someone and shake hands it should be just that.  I have a sister in law that is a realtor (we sold the house ourselves) that just about $%@# when i told her we would not be taking more offers.  She thought that it would bite us in the tail end.  Nope, no issues with the sale and everyone was happy.