Friday Update May 21, 2021
We've got 465 single family homes on the market today, that's like 15% more than last week and still far from enough. Rates are steady, demand is steady, prices are running up like something stupid.
888 sales month to date. So our supply is really like 8 days worth of inventory. During 2007 and 2008, the years that so many people keep telling me we are going to repeat any moment now, we had 7 months of inventory. We have 8 days now. Median price is up over $430,000 for the first time ever but is totally keeping the trend of housing becoming more and more unattainable for more and more people. Corporate interests are in the loop and are buying up inventory to hold as rentals. That takes further away from the dream of homeownership as large conglomerates pay whatever it takes to get steady rental returns while milking the tax code for write offs. (legally and smartly)
This week I think I wrote like 11 offers? Maybe 15? More? IDK. I got one accepted so that was pretty neat. I'm coming to this shitty realization that I can not with a clean conscience tell my buyers to do what it takes to win in this market. That is waive your inspection rights, provide an appraisal gap guarantee of maybe $30,000 or more, double or triple the requested earnest money and have that go hard immediately meaning if you back out for any reason you lose that deposit. On top of that offers being written 12-15% over list are the norm. Basically people are gambling super hard assuming that we will continue to see 15% annual price increases, and while that happens I'm going to keep looking like a negative Nancy. But the minute the market softens the tiniest bit folks are going to start tapping out and I'll be all like "I told you so". Not really but I'll be thinking it. So like I said before when people ask me my opinion of any particular house or its price the honest answer is it doesn't matter what I think, someone with Cali money is going to prove me wrong again, bro.
Builders are bailing on contracts left and right. Giving buyers that have been waiting for months on their house to be built the option to walk away or pay a lot more than the agreed upon price. One instance this week here locally one of our fine builders proposed that the buyer pay an extra $86,000 above agreed upon price or see themselves out of the contract. The builders have waiting lists of people ready to jump in and pay the higher prices, and pushing out their existing buyers seems like a rational decision considering the hits the builders took on costs. I hear in Denver the same stuff is happening but with even bigger numbers. That's a really shitty way to run a business and it will leave people homeless in the process. But hey, such is life right?
Basically in a nutshell if you're thinking about buying a house prepare to get your ass kicked. If you're thinking about selling please give me a call and let me blow your mind with some comps. It's stupid out here.