I’m reading about this dilemma everywhere. The plight of the first-time home buyer. People like me that are finally able to perhaps own a small home, but are outbid by people with lots of cash.
On Saturday I bid on a condo in that complex I’ve always loved. One-story bungalows in a perfect location. The ones I’ve coveted for years. I bid over the asking price, but my bid was not accepted.
Two of these same condos sold the week before for $10,000 less than the price of the one I bid on. But I wasn’t pre-approved for a loan at that time.
What Seems To Be Happening:
Most likely someone came in with a cash offer. That’s what’s happening now. Buyers are walking in with many thousands of dollars over the asking price to sweeten the deal.
Google reported in April that the search “When is the housing market going to crash?” had spiked 2,450% in the past month.
“Why is the market so hot?” searches had doubled in just a week.
And, in the most telling indication that the market may be in a bubble, “How much over asking price should I offer on a home 2021” jumped 350% in that same week.
What I’m Looking For In A Home:
I’m not looking for anything fancy. Just a little bungalow under 1000 square feet with a small yard. But those homes are being snapped up almost immediately or even before they are listed.
It is very much a seller’s dream market.
I read a thread on Twitter about people just like me attempting to become a first-time homeowner and being outbid over and over again. They are disheartened.
How Covid Is Affecting The Housing Market:
The Covid-caused crisis unfolded in the opposite direction of what was expected. Buyers are bidding up home prices and causing homes to sell quickly in competitive housing market conditions.
Currently, there is an extremely tight supply of homes on the market, the lowest on record since the turn of the century. Home price growth continues to surge in double-digits due to tight supply and lower interest rates or borrowing costs.
Increase In People Working From Home:
Low mortgage rates and an increase in working from home ignited by the pandemic have fueled a rapid increase in housing demand. More existing homes were sold in 2020 than in any year since 2006.
Every day I also look online at rental homes to lease. The cost of rentals also increased dramatically. That was why I turned to the option of purchasing a home in the first place.
So in terms of buying a home, I guess I’ll just keep looking. Hoping I can happen upon something within hours of it going on the market in order to have a fighting chance of buying it.