Quote:
Originally Posted by zx10guy
Maybe someone can explain this to me. I get that housing demand has been increasing over the years which has driven up prices. What I don't get is this overnight boom that's to me artificially driving up prices to bubble levels. I've heard everything from low interest rates and pent up demand causing the huge demand. Well, what good is low interest rates if you're losing that savings by paying above what is "reasonable" market for a home. Then the huge demand. People were living in homes before this run up. I don't see a mass of homeless people all of sudden getting financially healthy that is significantly adding to the pool of buyers. I heard financial institutions are playing into this frenzy by buying up real estate. I'd like to know how big a percentage it is.
This is all the same in my eyes as the craziness going on in new and used car sales. It seems people just flushed any common sense they had down the toilet.
Here is a classic example of this irrational behavior:
https://www.washingtonian.com/2021/0...ing-88-offers/ |
Demand has been steadily rising while supply, especially in covid, took a huge hit.
Add the low interest rates, and many who have been renting for years are now able to "afford" to buy houses. Its why the entry level market is so cut throat. Most areas if you dont offer above ask and remove contigencies, your offer gets laughed out in the entry level price points.
Its also geographical. The places where people are wanting to move to are seeing a massive upswing in home prices, where less desirable places arent. Pricing in Cheyenne Wyoming have stayed flat over the last year where as Denver has seen a 10% increase over the same time.
Places are also seeing a lack of land to build new homes. as this land becomes scarce, price of land goes up, which also affects the overall house price.