Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The normal people putting cash offers on houses in Cheverly in PG County were emptying out retirement/savings to compete. I say this as a seller who had visibility into their finances and my neighbor confirmed something similar when they sold a few weeks ago. People are doing anything to “win” and imo some of it is fueled by their realtors who do not know the market well enough to advise their client that it is unwise. PG has lagged behind DC/VA in appreciation and while there is a frenzy now, I bet there will be some buyers remorse coming next year. But great time for me to sell!

Our realtor was brutally honest and said something in a similar vein - that it is basically now utterly dumb to buy a home. FOMO is at peak, and it is making people do completely irrational things. He said he expects some correction over the next 6-12 months, especially with interest rates rising and unaffordability becoming a major problem. Just like stocks, you never wanna buy at the peak.

You never know when you are at peak. The biggest problem is supply is low and demand is high. Supply may increase as people feel more comfortable to list, but demand is also increasing. There is a housing shortage that has been building for a long time and the pandemic has made is worse by building demand for space and increasing costs for building supplies. I do not suspect the supply issue this will abate any time soon. But, as I said, you never know.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The normal people putting cash offers on houses in Cheverly in PG County were emptying out retirement/savings to compete. I say this as a seller who had visibility into their finances and my neighbor confirmed something similar when they sold a few weeks ago. People are doing anything to “win” and imo some of it is fueled by their realtors who do not know the market well enough to advise their client that it is unwise. PG has lagged behind DC/VA in appreciation and while there is a frenzy now, I bet there will be some buyers remorse coming next year. But great time for me to sell!

Our realtor was brutally honest and said something in a similar vein - that it is basically now utterly dumb to buy a home. FOMO is at peak, and it is making people do completely irrational things. He said he expects some correction over the next 6-12 months, especially with interest rates rising and unaffordability becoming a major problem. Just like stocks, you never wanna buy at the peak.

You never know when you are at peak. The biggest problem is supply is low and demand is high. Supply may increase as people feel more comfortable to list, but demand is also increasing. There is a housing shortage that has been building for a long time and the pandemic has made is worse by building demand for space and increasing costs for building supplies. I do not suspect the supply issue this will abate any time soon. But, as I said, you never know.

Anonymous wrote:

Anonymous wrote:The normal people putting cash offers on houses in Cheverly in PG County were emptying out retirement/savings to compete. I say this as a seller who had visibility into their finances and my neighbor confirmed something similar when they sold a few weeks ago. People are doing anything to “win” and imo some of it is fueled by their realtors who do not know the market well enough to advise their client that it is unwise. PG has lagged behind DC/VA in appreciation and while there is a frenzy now, I bet there will be some buyers remorse coming next year. But great time for me to sell!

Our realtor was brutally honest and said something in a similar vein - that it is basically now utterly dumb to buy a home. FOMO is at peak, and it is making people do completely irrational things. He said he expects some correction over the next 6-12 months, especially with interest rates rising and unaffordability becoming a major problem. Just like stocks, you never wanna buy at the peak.

Anonymous wrote:

Anonymous wrote:We went 1 for 5 over the course of 5 months.

3 of our 4 losing offers were over asking and all 5 offers waived every contingency. The only reason one offer was not over asking is because we could not float the appraisal gap where there was no chance of the house appraising even at asking since list price alone would make it the most expensive home ever sold in the neighborhood. That house ended up getting several offers for well over asking (pending, not yet closed).

Two of the losers were 20+% over asking price and lost to slightly lower all cash buyers. One closed within the week. Each of the four losers had anywhere from 5 to 14 total offers.

Our budget was in the $1.4M to $1.7M range (depending on level of renovation/updating needed). We were primarily looking in upper NW, Crestwood, Takoma/TKPK, Shepherd Park, and close in MoCo. We would look at the occasional Cap Hill, Hill East, or Brookland property, but nothing was ever a serious contender there.

Our winner was in N Arlington (still pending). We had originally dismissed VA altogether, but market forces pushed us to look where we didn't initially want to buy. The house was a unicorn for us in terms of amenities, style, newness, and proximity to metro to make the location compromise acceptable. We found the competition for this house not as strong comparatively. There were only two other offers and we won with $20k over asking, but without escalating to our cap for that property.

We probably could have eventually bought in our first tier locations, but it would have been outdated and required hundreds of thousands of dollars in updating and years sunk in waiting for it to be something we liked. Our (soon to be) house needs simple cosmetic items.

Why didn’t you like Arlington/NoVa in the first place? Just curious.

Anonymous wrote:The normal people putting cash offers on houses in Cheverly in PG County were emptying out retirement/savings to compete. I say this as a seller who had visibility into their finances and my neighbor confirmed something similar when they sold a few weeks ago. People are doing anything to “win” and imo some of it is fueled by their realtors who do not know the market well enough to advise their client that it is unwise. PG has lagged behind DC/VA in appreciation and while there is a frenzy now, I bet there will be some buyers remorse coming next year. But great time for me to sell!

Anonymous wrote:They need to get rid of 1031s altogether. It's a ridiculous tax break that overwhelmingly benefits the haves. Also, they need to tax the shit out of ownership of multiple properties. Investment groups and firms pay all cash and hoard insane numbers of properties because they treat housing like the stock market. People need a goddamn place to live, and they sure as hell ain't building more places to live because NIMBYs block everything. The situation is completely unsustainable unless you want a French Revolution style uprising of eating the rich. You want to hog properties? OK. Pay more tax.

Anonymous wrote:We went 1 for 5 over the course of 5 months.

3 of our 4 losing offers were over asking and all 5 offers waived every contingency. The only reason one offer was not over asking is because we could not float the appraisal gap where there was no chance of the house appraising even at asking since list price alone would make it the most expensive home ever sold in the neighborhood. That house ended up getting several offers for well over asking (pending, not yet closed).

Two of the losers were 20+% over asking price and lost to slightly lower all cash buyers. One closed within the week. Each of the four losers had anywhere from 5 to 14 total offers.

Our budget was in the $1.4M to $1.7M range (depending on level of renovation/updating needed). We were primarily looking in upper NW, Crestwood, Takoma/TKPK, Shepherd Park, and close in MoCo. We would look at the occasional Cap Hill, Hill East, or Brookland property, but nothing was ever a serious contender there.

Our winner was in N Arlington (still pending). We had originally dismissed VA altogether, but market forces pushed us to look where we didn't initially want to buy. The house was a unicorn for us in terms of amenities, style, newness, and proximity to metro to make the location compromise acceptable. We found the competition for this house not as strong comparatively. There were only two other offers and we won with $20k over asking, but without escalating to our cap for that property.

We probably could have eventually bought in our first tier locations, but it would have been outdated and required hundreds of thousands of dollars in updating and years sunk in waiting for it to be something we liked. Our (soon to be) house needs simple cosmetic items.

Anonymous wrote:

Anonymous wrote:I truly don't understand why sellers take an all cash offer that is lower than another offer. Won't the seller end up with the larger amount of cash if they take the higher offer even if its a 10% or 20% DP and the rest a mortgage? Why would a seller care?

Because if there is an appraisal contingency then higher price doesn’t matter as buyer can renegotiate to appraised price and walk if seller refuses to budge. Also, even without appraisal contingency, there is appraisal contingency language built into a financing contingency. The way the contract is written matters.

Anonymous wrote:I truly don't understand why sellers take an all cash offer that is lower than another offer. Won't the seller end up with the larger amount of cash if they take the higher offer even if its a 10% or 20% DP and the rest a mortgage? Why would a seller care?