6 ms·

I personally know of two parties currently trying to buy a house. The first is a young couple in New Jersey. The other is a retired couple in the Tampa Bay ar

I personally know of two parties currently trying to buy a house. The first is a young couple in New Jersey. The other is a retired couple in the Tampa Bay area in Florida. Both of them are extremely well-qualified. Both of them have put in at least 3 bids on houses in the last year or so and every time they got out-bid by a lot. Imagine a listed house at $600,000. You offer $620,000. You lose and find out later the house sold for $720,000. This is freaking New Jersey and Tampa, Florida. None of this is realistic. Why is it like this?

s1artibartfast 5y ago
It is actually insane I just lost after putting a $1,325,000 bid on a $1,000,000 list price for a 1000sqft house Edit, Zero added
- gautamcgoel 5y ago
  OT, but I enjoy the hitchhiker's reference in your username :)
- daenz 5y ago
  Well clearly you were an order of magnitude too low. Edit>> they left off a zero in the first number.
  - s1artibartfast 5y ago
    Thanks! Now I get why my offers keep getting turned down =)
pavlov 5y ago
At the same time Zillow managed to lose a billion dollars last year buying and selling homes (the so-called “iBuy” program that they were forced to terminate). Something doesn’t add up? But maybe it’s just a question of most homes on the market actually not being desirable enough to get these high bids.
- timy2shoes 5y ago
  The bidding up is exactly why Zillow lost money. Algorithmic house buying suffers from the winners curse. When Zillow thinks they are getting a good deal, there are usually extenuating circumstances that are apparent to local buyers which cause them to not bid up the price. That and the iBuy program was expanded way beyond the original scope.
onlyrealcuzzo 5y ago
I was bidding in Los Angeles 10% over asking, but the sale price was usually 30-50% over asking. I just moved to Chicago instead and got a place for 10% under asking...
- rootsudo 5y ago
  I like Chicago, was it in north suburbs? Looking at two flats/three flats, everything there is quite affordable, but am worried about IL itself and cook county taxes.
  - onlyrealcuzzo 5y ago
    No - Wicker Park. Love it. My family isn't too far away, and I had a few close friends there, so it worked out surprisingly well.
  - Kon-Peki 5y ago
    The current governor has done an outstanding job getting the state's fiscal house in order, and neither Republicans nor Democrats are happy about it. But you can look at the numbers yourself and see that the state is doing very well. Cook County... Well, that's a different story. The current assessor is following through on his campaign promise to clean up the assessors office and make property assessments modern and fair. And everyone hates him. If his reforms survive, the next step is to start a fight over how much everything costs. And then Cook County will be well on its way to fiscal health. If the reforms do not survive... But you should also note that property taxes as a percentage of property value are significantly lower in the city of Chicago than suburban Cook County. Like a house in Chicago could be paying half the property tax compared to a similarly-priced house in Glenview.
    - rootsudo 5y ago
      It has been quite a while but that's good to hear, that was worrying back a few years for the state! But that's also interesting to note that city of Chicago is quite cheap then unincorporated? suburban cook county, the thing of course is all the historical reasons why city of Chicago is empty, though as of late, Bronzeville and more south has not been so bad. So many beautiful houses there that were/are still quite cheap, relatively and good property.
itake 5y ago
You can't look at the asking price and assume it aligns with the current market. Often they will put low-ball askings to get more eyeballs on their listing. Their agent should of informed them of realistic offers. What price was the comp homes being sold for?
vkou 5y ago
> Why is it like this? It's like it because the house isn't actually worth $620,000. It's worth closer to $700,000, but if the seller underprices it, they are hoping that emotionally attached people with more money than sense enter into a bidding war, that drives the sale price way past its real value. The best way to drive up the sale price for your house is to offer it for a bargain. When looking at housing cost trends, don't look at listing prices, look at sale prices. Sale prices in that area didn't go up by 20% over the span of a week. If they did, those houses would be selling for trillions of dollars by the end of next year.
hardtke 5y ago
I saw a 2200 square foot house in Mill Valley, CA on Twitter this morning. It was listed for about $3M and went for $1.6M over asking. Over $2000 per square foot. On the other hand, the pictures seem to suggest it has the perfect Pottery Barn look that buyers want. One thing that the Fed report fails to consider is the cost, time and hassle of renovations. To get to that Pottery Barn look on a non renovated house would require at least a year and be very, very expensive (probably $1000 square foot just for renovations). Also, it doesn't seem like anyone in the most desirable neighborhoods is selling, as it is basically insane to sell when the houses are appreciating at 20% like clockwork. So you have a desperate buyer that has to pay $1.6M on the single perfect house to come on the market this year. House details: https://www.zillow.com/homedetails/38-Sycamore-Ave-Mill-Valley-CA-94941/19255371_zpid/ https://www.zillow.com/homedetails/38-Sycamore-Ave-Mill-Vall...

s1artibartfast 5y ago

It is actually insane I just lost after putting a $1,325,000 bid on a $1,000,000 list price for a 1000sqft house Edit, Zero added

gautamcgoel 5y ago
OT, but I enjoy the hitchhiker's reference in your username :)
daenz 5y ago
Well clearly you were an order of magnitude too low. Edit>> they left off a zero in the first number.
- s1artibartfast 5y ago
  Thanks! Now I get why my offers keep getting turned down =)

pavlov 5y ago

At the same time Zillow managed to lose a billion dollars last year buying and selling homes (the so-called “iBuy” program that they were forced to terminate). Something doesn’t add up? But maybe it’s just a question of most homes on the market actually not being desirable enough to get these high bids.

timy2shoes 5y ago
The bidding up is exactly why Zillow lost money. Algorithmic house buying suffers from the winners curse. When Zillow thinks they are getting a good deal, there are usually extenuating circumstances that are apparent to local buyers which cause them to not bid up the price. That and the iBuy program was expanded way beyond the original scope.

onlyrealcuzzo 5y ago

I was bidding in Los Angeles 10% over asking, but the sale price was usually 30-50% over asking. I just moved to Chicago instead and got a place for 10% under asking...

rootsudo 5y ago
I like Chicago, was it in north suburbs? Looking at two flats/three flats, everything there is quite affordable, but am worried about IL itself and cook county taxes.
- onlyrealcuzzo 5y ago
  No - Wicker Park. Love it. My family isn't too far away, and I had a few close friends there, so it worked out surprisingly well.
- Kon-Peki 5y ago
  The current governor has done an outstanding job getting the state's fiscal house in order, and neither Republicans nor Democrats are happy about it. But you can look at the numbers yourself and see that the state is doing very well. Cook County... Well, that's a different story. The current assessor is following through on his campaign promise to clean up the assessors office and make property assessments modern and fair. And everyone hates him. If his reforms survive, the next step is to start a fight over how much everything costs. And then Cook County will be well on its way to fiscal health. If the reforms do not survive... But you should also note that property taxes as a percentage of property value are significantly lower in the city of Chicago than suburban Cook County. Like a house in Chicago could be paying half the property tax compared to a similarly-priced house in Glenview.
  - rootsudo 5y ago
    It has been quite a while but that's good to hear, that was worrying back a few years for the state! But that's also interesting to note that city of Chicago is quite cheap then unincorporated? suburban cook county, the thing of course is all the historical reasons why city of Chicago is empty, though as of late, Bronzeville and more south has not been so bad. So many beautiful houses there that were/are still quite cheap, relatively and good property.

itake 5y ago

You can't look at the asking price and assume it aligns with the current market. Often they will put low-ball askings to get more eyeballs on their listing. Their agent should of informed them of realistic offers. What price was the comp homes being sold for?

vkou 5y ago

> Why is it like this? It's like it because the house isn't actually worth $620,000. It's worth closer to $700,000, but if the seller underprices it, they are hoping that emotionally attached people with more money than sense enter into a bidding war, that drives the sale price way past its real value. The best way to drive up the sale price for your house is to offer it for a bargain. When looking at housing cost trends, don't look at listing prices, look at sale prices. Sale prices in that area didn't go up by 20% over the span of a week. If they did, those houses would be selling for trillions of dollars by the end of next year.

hardtke 5y ago

I saw a 2200 square foot house in Mill Valley, CA on Twitter this morning. It was listed for about $3M and went for $1.6M over asking. Over $2000 per square foot. On the other hand, the pictures seem to suggest it has the perfect Pottery Barn look that buyers want. One thing that the Fed report fails to consider is the cost, time and hassle of renovations. To get to that Pottery Barn look on a non renovated house would require at least a year and be very, very expensive (probably $1000 square foot just for renovations). Also, it doesn't seem like anyone in the most desirable neighborhoods is selling, as it is basically insane to sell when the houses are appreciating at 20% like clockwork. So you have a desperate buyer that has to pay $1.6M on the single perfect house to come on the market this year. House details: https://www.zillow.com/homedetails/38-Sycamore-Ave-Mill-Valley-CA-94941/19255371_zpid/ https://www.zillow.com/homedetails/38-Sycamore-Ave-Mill-Vall...