[vbtemp]

I just got an update from my realtor that, compared to 2021, houses are now getting 5-10 offers instead of 10-20. Every open house I go to is packed and has an offer deadline at noon the day after (they aren't bluffing - it goes straight to under contract the next day). It's impossible to have any contingencies - even home inspection. Most are going for $50-$100K over asking. This is even with 7% interest rates, the stock market down 20% and tens of thousands of layoffs in my relatively tech (and Amazon) heavy area. The rental market is so tight - there's basically nothing on the market and the few dilapidated homes that go for rent are between $5-7k/mo. And this is late-March 2023.

[jeffbee]

In the 90s it was typical for a house to be on the market for 3-6 months before selling. Sellers generally received 1 offer.

Currently the nationwide days-on-market is still way below long-term historical norms and even below recent history. https://fred.stlouisfed.org/series/MEDDAYONMARUS

[lallysingh]

Part of it is the web. Buyers are looking at easily 10x the number of homes they used to, if you include all the ones they look at online.

They have a much better idea of what's available and what's a good match for what they want.

[arcticbull]

That was before the major housing shortage. The US is short about 6M homes by some measure [2], and the Bay Area is short a staggering quantity all by itself, so much so it has its own Wikipedia article. This remains the fault of onerous zoning rules and NIMBYs. [1]

[edit] No supply + high demand = prices go up. Higher interest rates only help at the margins because it doesn't actually change the demand factor which is that the humans in America need a place to live, and the more they make, the more they can afford to pay. And it certainly doesn't change the supply factor!

[1] https://en.wikipedia.org/wiki/San_Francisco_housing_shortage

[2] https://www.cnbc.com/2021/09/14/america-is-short-more-than-5...

[jldugger]

> In the 90s it was typical for a house to be on the market for 3-6 months before selling. Sellers generally received 1 offer.

I wonder if there's been a material shift in who is making offers that won't revert to 90s behavior. Specifically, investment firms specializing in single family housing, who might have more incentives to make a lot of lowball offers and not worry too much whether they win or lose a specific bid.

Obviously you have imitators like Zillow trying to edge in as well, and step back after taking heavy losses, so its hard to say for sure where the new equilibrim will end up at.

[jedberg]

Interest rates in the 90s started in double digits and ended just below that. Also things that weren't mortgages (like cars) still had double digit interest. In 1999 I paid 13% interest for my car.

[xirdstl]

That must be specific to your market. That's not what I'm seeing in the Denver area, speaking as someone who has been casually looking for a house for over a year.

As soon as interest rates started rising, conditions went from what you describe, to, in a lot of cases, houses sitting weeks or months on the market. They go through, sometimes, multiple prices drops before going under contract.

I'm speaking specifically of homes that are in the range of those I'm considering purchasing, so maybe it doesn't apply to the overall market. For me, though, it is now much more of a buyer's market than it was a year ago.

[vbtemp]

I observed that happening for about a 6-8 week period in Oct-Nov-Dec 2022, then the party returned like it was 2021 all over again.

[AviationAtom]

That's because people are still not shedding the mentality of hoping to get top dollar. The market is going back in the buyer's direction. You need to be looking at recent comparable sales and pricing at or below surrounding current inventory if you want to move it quick. The mania did a number on people's perception of how the housing market should work. It will pick back up just as soon as the Fed officially backs off on rate increases, or even makes a slight cut, likely soon here.

[subsubzero]

I'm near you in Boulder area and I am seeing the same thing, huge drop in interest on houses in the market, last year places would get under contract within a week, now its houses sitting on the market for weeks and even months. I talked to our realtor(we are planning on moving again for a work related job) and she said average days on the market has doubled from last year in the Boulder metro area.

[agloe_dreams]

I would say, even further, here in the rust belt there is a whole other problem:

Inventory is gone. Not low. Gone. In the 45 mile radius we are looking in for an area with a pop of ~100,000, at houses under $350k (90% of listings)...there are weeks with ZERO listings.

This has lead to an insane situation where offers end up way over asking but there are so few comps that virtually all FHA is back out, not because of issues with the offer but because the appraisal issue: no house actually apprises near the price it goes for.

If you take a look at Zillow, most houses that sold last in 2019 after a renovation, with zero changes since, are listing at $330k. This has crunched the rental market as one would expect. Rental prices, in absolutely a low cost of living area have multiplied overnight from ~$700 to $1500+. I know most in this area are absolutely not paid like us so I'm pretty sure the area is about to hit a wall. One might expect a market to limit itself as homes that cost too much wont sell..but the other side of it is that I think we are getting to a flexible point of 'well everyone needs a home', I mean...is this a housing bubble coming? When that bubble pops, what happens to all the people with $350K loans on houses that are back down $200K?

[gautamdivgi]

I think that’s the downside of raising interest rates. Obviously I’m no economist, but if rates are high and I’ve already got a home I will not move. If people don’t move inventory is low and needs to be built. High interest rates probably put a crimp on new buildout. Just my thoughts.

[TheMagicHorsey]

I left the Bay Area in 2020 and started working remotely because I didn't want to enter the real estate market at the top, right before a crash.

I've never believed in doing something just because everyone else thinks its the default thing to do. Putting 1.5M to 2M into a small average house didn't make sense to me when that is enough money to retire in many different beautiful places in the world.

So I left. Switched jobs and started working remotely. I now live in a MCOL area and things are about 30% cheaper than the Bay Area. Better schools. Nicer environment. More diversity (including economic diversity). More access to activities (like gymnastics) for my kids at a reasonable price. More free time.

I make a little less money in cash. And a lot less money in equity. But all in all its a better life.

I hope more people open their eyes and realize these tech hotspots are actually hell.

[zeroonetwothree]

I think that critiques of the Bay Area are overstated (probably because of cognitive dissonance). Yes, it's extremely expensive, but it's also very nice. If you can afford it I don't think there's any inherent reason to expect to like anywhere else more. Of course if you can't afford it then, yes, you should probably leave, but that's not some crazy revelation.

[rajup]

> I hope more people open their eyes and realize these tech hotspots are actually hell.

Wouldn’t that make the other currently nice places hell again :^)

[0xffff2]

I'm curious where you live that you find more diversity? I also moved out of the bay in 2020, have lived a few places since and the diversity of the bay area is pretty much the only thing I miss.

[onlyrealcuzzo]

What market?

Anecdotally, I follow many smaller markets in the Midwest and the South (plus Chicago). I wouldn't call it a buyer's market anywhere. But I'm not seeing anything like this.

I also have a few friends shopping on the East coast - and they're in a similar situation. It's not a buyer's market. But also not crazy.

My understanding was that The Bay, SoCal, and Seattle had massively slowed down. So I'm just wondering where this could be - or if things have recently turned around a lot.

Maybe my info is just bad...

[jedberg]

The house around the corner from me in Cupertino just sold. It's 1700sq ft on a small lot, and they were asking $3M for it. It sold for $3.2M four days after the open house. It sold so quickly they cancelled the second open house. Apparently they got 20+ offers.

So at least here in Cupertino, things are still nuts.

[purpleblue]

San Francisco condos are down a lot, many going for less than $1000/sqft now. But that's also the political climate and the increase in crime that is contributing to all that. I might come in when condo prices fall to about $600/sqft.

[itake]

I heard a similar story about Bellevue and Sammamish, WA. North Seattle-area (Edmonds, Lynnwood, Mill Creek, etc) have seen a price decline.

[vbtemp]

Many of the Northern VA counties and certain others in the DC metro area.

[jjk166]

I've been looking around the suburbs of Philadelphia, it's been a frenzy since summer of 2020. I guess it's slightly better in the sense that houses stay on the market for a few days instead of a few hours, but it's still absurd. My uncle, who is also in the area, put his home up for sale about a month ago and got a multimillion dollar offer same day without anyone even looking at the place. Even though prices have tripled and mortgage rates have doubled, a mortgage is still cheaper than rent.

[sharkmerry]

entirely anecdota but a house me in the peninsula bay area, got bought for 1million (3/2) 8 months ago. got reno'ed- listed for 1.698 a month ago- went for 1.755

[Mizoguchi]

I have noticed the same trend where I live and among my close group of acquaintances and friends. Some couples are buying houses way north of 600K even while still having a mortgage on a perfectly nice home a few blocks away. My wife and I look at each other completely puzzled. Like what is going on? Are people making this much money? Or are they getting into terrible deals due to FOMO? We could certainly afford a new home now but no way in hell we are jumping on this market, our money goes to buy discounted stock or sits on CDs.

[bufferoverflow]

It could be an inflation hedge. You buy a house at a fixed rate, you pay your $5K/mo mortgage for 30 years. Meanwhile inflation makes this $5K less and less in real value. But you can rent it out for more and more.

[tonymet]

With savings & investments so volatile people are taking riskier bets in order to diversify

[hartator]

> I just got an update from my realtor that, compared to 2021, houses are now getting 5-10 offers instead of 10-20.

Well, Realtors are incentivized to portray the market hotter than it actually is.

[vbtemp]

They are portraying the market exactly as it is. Reality is speaking for itself, not the realtors.

[rednerrus]

I've been to the open houses and I've been watching Redfin and seen the houses come open on Thursday and pending on Monday.

[pc86]

What is the average selling price? Median for my county is ~$325k and our experience matched yours exactly up through and including the $800s. You really had to be looking at stuff 3-3.5x the median price to have a reasonable experience where you could do an inspection or expect them to replace the 19 year old furnace (or at least credit most of a new unit).

[sciencesama]

Hmm, wait for a couple of months and see how the value of the homes fall !!

[pascalxus]

We hear this ALLLLL the time. I've heard it for nearly half a decade as I waited and waited and waited forever to buy a house, and yet through all of the disasters, house prices just kept going up and up and up.

The assumption is, since almost no one can afford a house, prices MUST fall. Here's the thing no one gets: the "almost" part is very important. If, in a city of 100,000 people, only the richest 100 can afford (less than 1% of the population) a house but there's only 10 houses on the market, then prices can still continue to skyrocket.

Overall demand does not need to be super high for prices to go up. It's Demand relative to supply that matters. And in markets where supply is really really tiny then demand doesn't need to be very high in order to outstrip supply.

[vbtemp]

The funny thing is, people were saying that in 2021... and then... interest rates doubled/tripled crippling affordability, people's net worth plummeted due to decrease in stock prices, and more people got laid off... And everything keeps on trucking straight through it. I visited my realtor when she was showing a house for sale, and it was astounding the traffic and people coming up whispering to her how they wanted to make an offer that moment. And then on top of that the offers that came in with escalation clauses, waiving of all contingencies, etc. And this is March 2023.

[dilyevsky]

People will not sell at a loss bc they locked in to 2% mortgages for 30 years so no

[jorblumesea]

> 2017 home prices are unsustainable!

> 2019 it has to crash sometime

> 2022 ok now is the time for home prices to call

> 2027 it must crash!

The reality is that home prices are buoyed by a number of systemic factors that cause supply to be constrained. Prices will go down in total value due to interest rate rises. Homes will not be more affordable.

[tomrod]

Pressure is on supply, demand relatively strong as ever.

Supply: low and expensive new builds, heavy rate lockin.

Demand: muted due to higher rates, but sometimes people gotta move. So a slight haircut, but in many areas most likely less haircut than supply constraint.

We are seeing some sifting in the market but I personally believe sales volume is driven by supply lockin, meaning its still a seller's market.

[afavour]

I'm not saying it won't happen but people have been saying exactly this for a decade.

[waynesonfire]

what are they going to wait for? the rate of increase to decline 5 percent?

[bdcravens]

I bought into a new community northwest of Houston, closed last summer. It's about 75% built out, and the new houses are sitting available for some time.

[hcurtiss]

Anectdotal, but the same is happening in the mid-Willamette Valley, Oregon. We've recently seen houses listed and sell next day for over asking. How those prices line up to historic averages, I can't say, but after a maybe 5 month cooling period, I can say things have definitely picked up in our neighborhood. We have two close realtor friends and they confirm the same.

[Fatnino]

Theres a house on my street in palo alto thats been sitting on the market for some 3-4 months.

Previous owner died, someone bought it and cleaned it up to flip it. It actually looks very nice.

No one is buying it though.

[alpineidyll3]

A) Tune out anything realtors tell you if you want to be an intelligent consumer. B) Volume has collapsed because people in homes with low rate morts can't move. These prices are "less solid" because liquidity is poor.

In Austin prices are def. down ~ 8%, after this hike and sustained layoffs I am betting it will shed another 8 by the end of summer...

[62951413]

All of that to buy something like a 2 bed, 1 bath SFH of 735 sqft built 76 years ago for $1M (https://www.realtor.com/realestateandhomes-detail/1761-Geary...).

[debacle]

Higher interest rates lower demand, but they also lower supply.

In our area, age on the market is increasing and I think the average for some areas is over 60 days, which is an indicator for a buyers' market.

[AviationAtom]

Inventory is still below demand in most places. People are just freaking out because the mania has subsided. I'd call this current market about normal.

[stephenitis]

What state, region, market are you in?

[lazide]

That’s because it’s worse, but not really bad yet.

[subsubzero]

I assume you are in the Seattle metro area?

[coolbreezetft22]

I follow the market for Seattle East side pretty closely and prices have definitely dropped compared to a year ago. A ton of houses that were listed with ridiculous early 2022 prices have been re-listed multiple times to lower prices, in many cases dropping the price by well over 6 figures. One example a house in my neighborhood initially listed for 1.8m ended up selling for 1.45m

[vbtemp]

No, which goes to say the price-escalations and white-hot housing markets are still a thing across North America, straight through the tech crash, bond crash, layoffs, and now banking crisis.

[tonymet]

There are obviously huge distortions in the housing market.

- how many buyers are investors from private equity or foreign investors vs residents (who intend to live in the property)?

- What is the true population including undocumented people? this will be off by 30-50% in some areas

- What is the true vacancy rate? In my area there are many houses sitting vacant. I’m assuming they are investments or tax dodges

It baffles me at how critical the housing market is and that no one takes responsibility to understand what is affecting prices. We just accept prices as a force of nature.