A house near to us went on the market for $868k for 4 bd/2.5 ba, 3028 sq ft with a 4400 sq ft lot. It went on 3/23/16. The craziness? It was bought last year 2/20/15, yes 13 months ago for $789.9k and no work has been done.
The house was built in 2012 and sold 6/1/12 for $669.9k. Then sold less than 3 years later for $100k more, but now in 13 months the sellers are asking $78k more than they paid or 10% appreciation. How much longer will this type of appreciation last?
The sellers are moving back to where they are from. They bought because of course you make money and renting is a waste. So if we had bought last summer before DH quit, with our cash and credit would we have made 10% in 6 months? I think maybe.
I'm sitting here pondering because we planned on looking this summer. But I'm really nervous this is going to turn ugly. That we'll again buy at the peak of the market in a market we don't fully understand.
Thoughts?
is this a bubble?
March 25th, 2016 at 12:07 am
March 25th, 2016 at 01:17 am 1458868649
March 25th, 2016 at 01:36 am 1458869788
March 25th, 2016 at 02:09 am 1458871750
I'm not confident the milleniums want to buy a house, they operate on a different system of values. However, I recall my dad saying how puzzled he was by the change in values demonstrated by my brothers and I. His issue was that while his and mom's brothers, sisters knocked themselves out to live nearby one another, our generation married partners from other cities, and sought employment 'adventurers.'
March 25th, 2016 at 11:23 am 1458905001
To folks from China or other Asian countries that prefer cities, San Francisco looks relatively cheap compared to London or Manhattan. Seattle, Portland and Vancouver also look cheap. Those folks don't see a pricing problem.
I live in Silicon Valley. We have seen the boom and bust cycles before. The tech economy is the primary driver here, with Asian money a close second. I would not buy here today, because I'm pretty sure the law of economic cycles has not been repealed.
Also, the density of people in the Bay Area has become intolerable. Population density, traffic, and access to amenities for the next ten to fifteen years would be part of my consideration of whether to buy or rent as well.
March 25th, 2016 at 05:09 pm 1458925741
March 25th, 2016 at 08:26 pm 1458937574
March 26th, 2016 at 03:54 am 1458964486
AR what's the law of the economic cycles? What do you mean boom and bust? How long between cycles? How do people compete to buy and live? Is renting the only answer?
CeeJay, I thought wages had stagnated too and I'm surprised how many people are affording homes so easily. I'm also surprised people make so much money.
Rob I don't understand it either.