Wednesday, July 12, 2017

Crackers House Prices in California #RealEstate #Economy

California has had a reputation for crackers house prices for many years but they're really outdoing themselves now since the buyers are driving the price spiral and willingly.  (The Mercury News:  Bay Area’s dizzy real estate market: ‘Over asking’ bidding wars escalate)

As you see, it's nothing but a dinky, little, nondescript grey house but check out the sale.

This house in Sunnyvale listed for $999,000 and sold last month for $1,210,000 — $211,000 above the asking price. Dozens of homes in Sunnyvale and Cupertino sold in the last 30 days for at least $200,000 above listing price as buyers competed for limited housing stock in hot markets.

(Courtesy Mark Wong/Alain Pinel Realtors)


Bravissimo, California home buyers.

When they're willing to go twenty percent on a million-dollar purchase to ensure the sale, you've got a crew which is ready for refrigerators in Alaska.  There's gold up there, son.  Don't you miss that Gold Rush and, by the way, you will need a refrigerator at a nominal cost but we have those available.  We're here to help.

To wit, this example: Alain Pinel agent Mark Wong sent out an email blast Tuesday revealing that around 60 South Bay homes, mostly in Sunnyvale and Cupertino, sold for $200,000 or more over the asking price in the last 30 days. And he wasn’t necessarily talking about fancy schmancy places. One modest Cupertino house — 1,046 square feet — sold for $660,000 above its listing price.


Wow ... with square footage like that the house measures about the same as my apartment in Rhode Island.

“Most of the agents, they love to list under the fair market value, so that’s why it creates an auction-style sale,” he said. “The buyers are smart people. They look around. And when they see a property below the fair market value, they think they’ve found a good deal and they’ll jump on it. Then everybody jumps and it bids up the price.”


Oh, yes, my brothers and sisters, these are most assuredly smart buyers, real financial wizards.  We can only hope they write books and make videos to share their wisdom.


Anonymous said...

Tis the market. Lots of money that doesn't want to drive far to work.
The economy is doing well, markets are rebounding. I have rental houses that have appreciated 100% in just 3 years
My location is adding 100 new families a day. You can't build houses that fast so the market is very very good. Most houses are selling without even listing.
Rents are increasing as fast. Those same houses that increased in capital value of 100% Are I crradong rents at a similar rate.
So those who bought real estate during the market capitulation are now looking like very good. And the banks that didn't liquidate those homes are also rather happy

Peas InOurThyme said...

That kind of wage / price spiral seems like something coming to a boil and we've seen it before. I think they might have turned up the microwave too high on that lot and they're cooking too fast.

In fact, there was a listing today for a house on the side of a cliff ... it's condemned and they're asking $850K for the property. Don't worry about the landslides. You'll get used to them???

Anonymous said...

Laughing Gecko said years ago that real estate will always go up in value as it is a finite resource and the demand will always be increasing. It is almost the only resource that the supply can not be increased.
I have zero properties worth less than I paid for them. Real estate in an average market doubles in value about every 10 years.
A great example was your parents house in Davis they sold it for $17k 50 years ago It last sold for almost $600k.
Hot locations will always outperform the market. It is not uncommon for condemned properties to sell for ridiculous prices based on location or the view that they have. I spend a lot of my time looking for these type properties
The last bubble was caused by reckless financing. Lack of Accountability by both the borrower and the lender and greed of the lenders caused it. 100% financing is a cancer as it allows consumers to buy over their heads. It also allows the borrower to get the house with very little commitment.
I had to save for the down payment of my first house so if I failed I lost my money not the lenders. A huge incentive to succeed.

Peas InOurThyme said...

600K for that crackerbox?? Fark! Alex put his fist through one of the doors just because he got bent about something. I don't know if Pete Seeger would be laughing or crying.

Your faith in the process really hasn't played out yet in California and I accept every bit of your logic. However, there are other confounding factors and the drought plagued the state for years. Suddenly they get a year with more snowfall than they can handle and they figure the problems are over. Yah, and have some more lotus with your tofu, Fantasy Man.

Unknown if you looked at the house on the cliff but that pad is one rainstorm away from a scene in "Lethal Weapon II" and you would seriously build on that location?