Housing market is nuts now

[robj144]

So, about a year ago I decided that I'm going to try to find a slightly bigger place this summer and move. The summer is best because I have some time off then to pack and move and it's also the best time to sell my current place.

Anyhow, in the winter I looked a bit, but not too much because I didn't want to move until the summer. I noticed the prices were up a bit (maybe 5 to 10%) from last summer, but it was managable for me.

Now, I'm starting to look seriously, and the market here has gone up 15 to 20% since just this winter. It's ridiculous. That increase in a few months is not normal. I also heard that most places are getting offers over asking too now.

I researched it and it's related to the fact people have saved a lot during the pandemic, stimulus and crypto giving people extra money, and there's a shortage of houses.

Seems like a bubble to me but most don't think it is because of the low supply and also lending practices are more solid now. I can probably swing a new place still, but I do not want to buy at the top of a bubble. My current place was purchased in 2007... a few months before the housing bubble burst then and it took 10 years to recover from that. I don't want to do that again.

Is it crazy around you?

[TRose]

Yes, prices are out the roof.
Apparently the only places where prices are dropping precipitously are in the urban centers. People have realized they can work remotely and are no longer anchored to their works location- meaning they can live where they want.

Couple that with the fact that when the wealthy can’t travel ( for obvious reasons ) they spend those disposable dollars on vacation homes.

If predictions are correct that a large portion of the work force will remain remote then the market is unlikely to see a “correction”. Demographics are changing and the market is changing with it.

[Dru Edwards]

Rob, the housing market in Canada is also nuts. Used home values have gone up significantly over the past year. In addition, with the cost of lumber 2-3 times higher over the past 12 months the price of building a new one has gone up significantly here. Even something simple like building a deck has doubled in price.

I'm glad I built my house 2 years ago.

[ahorsewithnonam]

It seems to be everywhere. I know it is here in central Ohio and in Florida. Houses in my neighborhood sell within hours of listings and over the list price. Don’t even have open houses. The sign goes up and the next day the sign is replaced with an IN Contract sign. Homes that had a market value of say $375k-$430k 6-7 months ago now sell for over $500k immediately. I get calls weekly from realtors here and in Florida having clients wanting to buy my home.

I remember back in 2005-6 when lenders were offering those stupid zero down, interest only loans only to see it all come crashing down in 2008. But there are no crazy lending practices like that now. Where are people getting the money? Why is the market so crazy?

[Gee Man]

I was hoping to get divorced this Spring/Summer, but there is no where to go, there are maybe 5 houses in my price range within a 50+ mile radius, and none of them interests me. Good thing the wife and I are more or less getting along these days.

[Slothead56]

Crazy everywhere. Frankly, I don’t know why anyone would use a realtor to sell a home now. With Zillow, Realtor.com and the like why do you need an agent? Save the 4-6%.

[fitness1]

You'd have to either be completely out of your mind, or have money coming out of your ears to buy a house in my area right now.

[1neeto]

Hawaii’s single family homes are reaching the $1,000,000 mark. It’s quite nuts.

[Wengr]

Yeah illness is causing me to sell my 3 story house and acquire a one story house. It's the reason I have a lot of stuff in the classifieds.
But it's basically impossible to buy a house here now.
People from NJ and NY are bidding above asking sight unseen.

I only hope as the pandemic fades there with be a reversal at some point and maybe there will be a buyers market for a bit.

[Carmel Cedar]

Rob, it is crazy here in WI and even more so out west. In AZ, homes are selling for 20% over asking, for cash, to escaping Californians.

I personally believe we will see a housing crash in <18 months (timing could vary, but the outcome won’t). The US is printing and spending so much vs GDP that I believe the economy will seize up when inflation (which is already MUCH worse than official stats) causes the spending to finally stop. When ‘common wisdom’ says housing (and stock, and crypto) run-ups will continue in perpetuity, it’s good to remember history. You are wise to be cautious.

[ahorsewithnonam]

And yet the unemployment numbers went way up

[woodbox]

Do you hear that sound?
Yes, that cracking noise?

Is that the thin ice beneath our feet?

[FLRon]

My neighbor sold his house within hours of listing it FSBO. Got full asking price too.

My own home value has shot up nearly 100k(per Zillow) in 4.5 years. This is insane and completely unsustainable IMO.

[Silurian]

We have the same happening here in the UK. House prices are rising at the fastest rate since 2004.

Some of the rises and demand appears to be greatest in what are considered "vacation" locations, counties like Cornwall.

Urban dwellers re-evaluating their priorities and wanting to re-locate, pent up demand during lockdown, low interest rates, etc. There appears to be many factors in play.

[ssstewart]

same here in New Brunswick Canada. house prices have increased exponentially. a 300k home = 400+k. a 500k home = 675k. thank gosh i bought this one in 2017 when me and wife downsized to a smaller home.

renters have seen increases as high as 80% ( there is no rental control in our province) and it has has terrible impact on pensioners/fixed income ppl.

Our province is a chief producer of lumber in canada ( we have tons of woodlands) yet even within our province, lumber prices and sundries have increased 200%-250%.

part of this has been attributed to the fact that Atlantic canada had faired very well with cases in the pandemic, and have seen ppl from other provinces and the US scooping up land/homes/summer homes at record levels never seen before, historically our area of canada had experienced a decrease in population for decades, now this has done a complete 180.