Comments on: 70% Of Offers Are On Homes With Multiple Offers http://blog.redfin.com/sfbay/2009/09/70_of_offers_are_on_homes_with_multiple_offers.html Redfin Bay Area Sweet Digs Tue, 07 Feb 2012 16:59:16 +0000 hourly 1 http://wordpress.org/?v=3.0.1 By: TSampson http://blog.redfin.com/sfbay/2009/09/70_of_offers_are_on_homes_with_multiple_offers.html/comment-page-1#comment-9144 TSampson Wed, 30 Sep 2009 04:59:22 +0000 http://blog.redfin.com/sfbay/?p=6520#comment-9144 "Multiple offers are common right now because 1. houses listed WAY below market value. If a house sold $150 over asking but where is that price compared to the market value? It’s never about the asking price." Hahaha. If you look at the long-term trending of the housing market, correct comps are around 2000 - 2002 prices. For many areas, we have an additional 20% downward-pricing left to go. How will that manifest? Will prices actually decline? Will the market track sideways for 5-10 years until inflation catches up? Will hyperinflation set in as a result of all the money the Fed printed? Factor in the Alt-A resets that are starting now and continuing through 2014, plus increasing unemployment, plus the "shadow inventory" of all the foreclosures that aren't yet on the market and all the owners 12+ months behind in payments who haven't even been foreclosed on yet! Take all of those attributes, throw them in the bucket, and roll the dice ... and you tell me where prices will be in 5 years. I'm betting not higher than where we are right now -- likely lower. No one knows for sure, but I can tell you that as a buyer with cash in hand and great credit, there's no way I'm paying above 2002 comps for anything at this time. You folks want to out-bid each other? Have fun. I'll be watching and laughing, waiting for the other shoe to drop. “Multiple offers are common right now because

1. houses listed WAY below market value. If a house sold $150 over asking but where is that price compared to the market value? It’s never about the asking price.”

Hahaha. If you look at the long-term trending of the housing market, correct comps are around 2000 – 2002 prices. For many areas, we have an additional 20% downward-pricing left to go. How will that manifest? Will prices actually decline? Will the market track sideways for 5-10 years until inflation catches up? Will hyperinflation set in as a result of all the money the Fed printed? Factor in the Alt-A resets that are starting now and continuing through 2014, plus increasing unemployment, plus the “shadow inventory” of all the foreclosures that aren’t yet on the market and all the owners 12+ months behind in payments who haven’t even been foreclosed on yet! Take all of those attributes, throw them in the bucket, and roll the dice … and you tell me where prices will be in 5 years. I’m betting not higher than where we are right now — likely lower.

No one knows for sure, but I can tell you that as a buyer with cash in hand and great credit, there’s no way I’m paying above 2002 comps for anything at this time. You folks want to out-bid each other? Have fun. I’ll be watching and laughing, waiting for the other shoe to drop.

]]> By: September Newsletter: Prices Up, Sales Down | Redfin Corporate Blog http://blog.redfin.com/sfbay/2009/09/70_of_offers_are_on_homes_with_multiple_offers.html/comment-page-1#comment-9143 September Newsletter: Prices Up, Sales Down | Redfin Corporate Blog Wed, 30 Sep 2009 01:06:07 +0000 http://blog.redfin.com/sfbay/?p=6520#comment-9143 [...] In the Bay Area, sales volume softened in August compared to July, but we think this is an inventory problem more than a demand problem: there was a 15% month-over-month decline in the number of foreclosed bargains selling in the market, leading to buyer frustration with “multiple offers and all-cash deals” on the limited foreclosure inventory; San Francisco inventory levels are down 11.3% compared to last year. At Redfin, we are operating at very low or negative margins in California because so many of our buyers are getting outbid. [...] [...] In the Bay Area, sales volume softened in August compared to July, but we think this is an inventory problem more than a demand problem: there was a 15% month-over-month decline in the number of foreclosed bargains selling in the market, leading to buyer frustration with “multiple offers and all-cash deals” on the limited foreclosure inventory; San Francisco inventory levels are down 11.3% compared to last year. At Redfin, we are operating at very low or negative margins in California because so many of our buyers are getting outbid. [...]

]]> By: kim http://blog.redfin.com/sfbay/2009/09/70_of_offers_are_on_homes_with_multiple_offers.html/comment-page-1#comment-9135 kim Mon, 28 Sep 2009 16:41:25 +0000 http://blog.redfin.com/sfbay/?p=6520#comment-9135 There is no demand, it is supply that is being held back. Organic sellers are underwater and the banks are holding back on foreclosing so they don't have to recognize the loss. There are no trade-up buyers, zero. There is no demand, it is supply that is being held back. Organic sellers are underwater and the banks are holding back on foreclosing so they don’t have to recognize the loss. There are no trade-up buyers, zero.

]]> By: JG http://blog.redfin.com/sfbay/2009/09/70_of_offers_are_on_homes_with_multiple_offers.html/comment-page-1#comment-9133 JG Sat, 26 Sep 2009 20:07:30 +0000 http://blog.redfin.com/sfbay/?p=6520#comment-9133 Rule #1 ... People dont learn... Please realize: This Govt Scam is underway again...pumping up the balloon again with our tax dollars. Higher the values, more to tax...got it? Let's Repeal Prop. 13 and lets see what happens then. Rule #1 … People dont learn…

Please realize:
This Govt Scam is underway again…pumping up the balloon again with our tax dollars. Higher the values, more to tax…got it? Let’s Repeal Prop. 13 and lets see what happens then.

]]> By: bruce3681 http://blog.redfin.com/sfbay/2009/09/70_of_offers_are_on_homes_with_multiple_offers.html/comment-page-1#comment-9132 bruce3681 Fri, 25 Sep 2009 20:39:40 +0000 http://blog.redfin.com/sfbay/?p=6520#comment-9132 This story is exactly why I fired my last Agent. Oh yes multiple offers. You had better get in there and join in the frenzy. Buy. Buy. Buy. When questioned she would tone down her reteric and produce reports showing waves of foreclosures coming down the pike. This market is so bipolar even the so called experts are sucked into the madness. Our market: Under $350k Only 4, four bedrooms are on the market. Two of those are trash. All of the rest of the properties listed are short sales which are not being processed or falling out of contract. My old agent stated that only 14% of the short sales are getting approved here. We are waiting until the games stop and housing prices revert back to the mean. More shoes to drop and much more pain and suffering is on the horizon. This story is exactly why I fired my last Agent. Oh yes multiple offers. You had better get in there and join in the frenzy. Buy. Buy. Buy. When questioned she would tone down her reteric and produce reports showing waves of foreclosures coming down the pike. This market is so bipolar even the so called experts are sucked into the madness.
Our market: Under $350k Only 4, four bedrooms are on the market. Two of those are trash. All of the rest of the properties listed are short sales which are not being processed or falling out of contract. My old agent stated that only 14% of the short sales are getting approved here.
We are waiting until the games stop and housing prices revert back to the mean. More shoes to drop and much more pain and suffering is on the horizon.

]]> By: jtc http://blog.redfin.com/sfbay/2009/09/70_of_offers_are_on_homes_with_multiple_offers.html/comment-page-1#comment-9123 jtc Thu, 24 Sep 2009 07:31:42 +0000 http://blog.redfin.com/sfbay/?p=6520#comment-9123 We're on our 9th offer and may finally win. 6 of those were multiple offer situations in which either cash or substantially higher offers won (like 55k over asking, but undoubtedly a great buy). There were 4 offers on #9---a weak cash offer, don't know about the other 2, and ours--10% over asking because we're going VA (sellers are often prejudiced) and we've been house hunting since February and getting our butts kicked. On #8 the other 2 offers were a least 3-5% over asking if not more (over 400k range). I'll have a couple of days to mull over buyer's remorse--- I'm afraid of overpaying, but the market in this area has been ridiculous. Inventory is nil and what pops up goes in like 5 days. (Also, this is a regular sale, which is rare) If this is happening in Pinole Valley, where there's not much going on, I can't imagine what it's like anywhere else. We’re on our 9th offer and may finally win. 6 of those were multiple offer situations in which either cash or substantially higher offers won (like 55k over asking, but undoubtedly a great buy). There were 4 offers on #9—a weak cash offer, don’t know about the other 2, and ours–10% over asking because we’re going VA (sellers are often prejudiced) and we’ve been house hunting since February and getting our butts kicked. On #8 the other 2 offers were a least 3-5% over asking if not more (over 400k range).

I’ll have a couple of days to mull over buyer’s remorse— I’m afraid of overpaying, but the market in this area has been ridiculous. Inventory is nil and what pops up goes in like 5 days. (Also, this is a regular sale, which is rare)

If this is happening in Pinole Valley, where there’s not much going on, I can’t imagine what it’s like anywhere else.

]]> By: sonrisa http://blog.redfin.com/sfbay/2009/09/70_of_offers_are_on_homes_with_multiple_offers.html/comment-page-1#comment-9120 sonrisa Wed, 23 Sep 2009 17:29:48 +0000 http://blog.redfin.com/sfbay/?p=6520#comment-9120 thanks for the clarification -especially the note about the east bay. very interesting. thanks for the clarification -especially the note about the east bay. very interesting.

]]> By: Chris Glew http://blog.redfin.com/sfbay/2009/09/70_of_offers_are_on_homes_with_multiple_offers.html/comment-page-1#comment-9116 Chris Glew Tue, 22 Sep 2009 23:58:57 +0000 http://blog.redfin.com/sfbay/?p=6520#comment-9116 techguy- We have clients all over the Bay Area trying to buy homes. We post these numbers and tips so buyers are more aware of what the market is like. We don't tell clients that now is a great time to buy. sonrisa- You're right, the two examples in the post are exceptional. I've inserted a header to make that more clear. We are seeing a lot of multiple offer situations all over the Bay Area. In August, 70% of the offers we presented were on homes with at least one other offer across the Bay Area. On the Peninsula, it was 90%. We included two anecdotes from the Peninsula because for most of the summer, most of the multiple offers were in the East Bay. techguy-
We have clients all over the Bay Area trying to buy homes. We post these numbers and tips so buyers are more aware of what the market is like. We don’t tell clients that now is a great time to buy.

sonrisa-
You’re right, the two examples in the post are exceptional. I’ve inserted a header to make that more clear.

We are seeing a lot of multiple offer situations all over the Bay Area. In August, 70% of the offers we presented were on homes with at least one other offer across the Bay Area. On the Peninsula, it was 90%. We included two anecdotes from the Peninsula because for most of the summer, most of the multiple offers were in the East Bay.

]]> By: Houseless in Milpitas http://blog.redfin.com/sfbay/2009/09/70_of_offers_are_on_homes_with_multiple_offers.html/comment-page-1#comment-9115 Houseless in Milpitas Tue, 22 Sep 2009 17:17:28 +0000 http://blog.redfin.com/sfbay/?p=6520#comment-9115 Multiple offers are common right now because 1. houses listed WAY below market value. If a house sold $150 over asking but where is that price compared to the market value? It's never about the asking price. 2. Inventory down 40-50% from LY in the areas where I am looking. 3. Still a lot more demand. Multiple offers are common right now because

1. houses listed WAY below market value. If a house sold $150 over asking but where is that price compared to the market value? It’s never about the asking price.

2. Inventory down 40-50% from LY in the areas where I am looking.

3. Still a lot more demand.

]]> By: sonrisa http://blog.redfin.com/sfbay/2009/09/70_of_offers_are_on_homes_with_multiple_offers.html/comment-page-1#comment-9111 sonrisa Mon, 21 Sep 2009 18:50:00 +0000 http://blog.redfin.com/sfbay/?p=6520#comment-9111 I have trouble reconciling the data on the right with the article above. The graph you present on the right gives an average list price of $527/sqft and an average sold price of $492/sqft. The blog article states many houses have multiple offers. The article then implies those offers are well above asking by citing two anecdotes. Isn't it more reasonable to conclude that the two anecdotes are the exception, and while multiple offers are being made, those are either (1) on a limited portion of the sales inventory (listings which, for some reason, are over represented among the houses redfin customers choose to buy), or (2) those multiple offers are usually well below asking. If this article only represents a few areas on the peninsula, perhaps you should specify that at the top, rather than describe it as a bay area phenomena. I have trouble reconciling the data on the right with the article above. The graph you present on the right gives an average list price of $527/sqft and an average sold price of $492/sqft. The blog article states many houses have multiple offers. The article then implies those offers are well above asking by citing two anecdotes. Isn’t it more reasonable to conclude that the two anecdotes are the exception, and while multiple offers are being made, those are either (1) on a limited portion of the sales inventory (listings which, for some reason, are over represented among the houses redfin customers choose to buy), or (2) those multiple offers are usually well below asking. If this article only represents a few areas on the peninsula, perhaps you should specify that at the top, rather than describe it as a bay area phenomena.

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