Austin Market has truly gone to **** (Brownsville, Round Rock: days on market, home sales, to live)

[riaelise]

Originally Posted by SummerGirl05

I'm in a bidding war for a rental! It's best and final. On a RENTAL! This is insanity.

What???? A rental? The rental price is the rental price. Never heard of that before

[SummerGirl05]

Originally Posted by Need4Camaro

Just wondering how does that even work?

Is it bidding for the highest monthly rent contract?

He had a list price and I guess he received multiple offers and offers above it...so he said to give best and final offers and they’ll decide on Monday.

Circle C Ranch

[SummerGirl05]

Originally Posted by riaelise

What???? A rental? The rental price is the rental price. Never heard of that before

I guess when there are multiple applications on day 1 they can ask for highest and best.

[Need4Camaro]

Bleh, this kind of non sense isn't worth it for a rental.

[SummerGirl05]

Originally Posted by Need4Camaro

Bleh, this kind of non sense isn't worth it for a rental.

It’s worth it if you HAVE to find a place to live and certain criteria is non negotiable. Like schools.

[ashbeeigh]

Circle C is where parents with kids want their kids to go to school. It’s the best feeder pattern in AISD. I absolutely see that happening.

[austin-steve]

Originally Posted by Austin97

The part you are getting wrong is prices are increasing so fast and supply/demand are so imbalanced that 1) appraisals are not being met 2) appraisal and inspection waivers as standard 3) many/most houses selling for massively over asking

that will not hold and prices will drop from these levels. They might not drop to 2019 levels, but much of the pressure will be relieved once inventory goes back up. This might not be until 2022 depending on vaccinations this summer.

I would say waiting until the covid pressure is relieved would be a good move.

Do you think interest rates will remain low? a 1% increase in interest rates mean the buyer approved for $500K can now only afford $450K. Meanwhile, if the $500K home they were waiting for increased to $550K, then "woops". Meanwhile, the $450K home they "waited for, was $400K at the start of their wait.

People have to live somewhere while waiting. A median value house typically rents for about 0.5% of sales value. So, $2,500/mo for a $500K home. $30K in rent while building no equity. That has to be factored in.

"Waiting" means moving twice, which can be very disruptive and expensive, so those costs have to be backed out as well as the rents.

Many other risk factors of "waiting that I won't go into.

I think it's WAY more risky to "wait" than it is to buy right now.

But we'll know eventually. If we start seeing short sales and negative appreciation in 2 years, then you will have been right. I am in the camp that says that won't happen, though I don't rule out some anecdotal instances of it occurring for bidders that went WAY above 2nd-5th place offers. I've seen that happen on the listing side.

[SummerGirl05]

Originally Posted by ashbeeigh

Circle C is where parents with kids want their kids to go to school. It’s the best feeder pattern in AISD. I absolutely see that happening.

As a parent with a kid - Bingo!

[SummerGirl05]

Originally Posted by austin-steve

Do you think interest rates will remain low? a 1% increase in interest rates mean the buyer approved for $500K can now only afford $450K. Meanwhile, if the $500K home they were waiting for increased to $550K, then "woops". Meanwhile, the $450K home they "waited for, was $400K at the start of their wait.

People have to live somewhere while waiting. A median value house typically rents for about 0.5% of sales value. So, $2,500/mo for a $500K home. $30K in rent while building no equity. That has to be factored in.

"Waiting" means moving twice, which can be very disruptive and expensive, so those costs have to be backed out as well as the rents.

Many other risk factors of "waiting that I won't go into.

I think it's WAY more risky to "wait" than it is to buy right now.

But we'll know eventually. If we start seeing short sales and negative appreciation in 2 years, then you will have been right. I am in the camp that says that won't happen, though I don't rule out some anecdotal instances of it occurring for bidders that went WAY above 2nd-5th place offers. I've seen that happen on the listing side.

There are also pros to renting that offset some of those financial hits like, no unforeseen repairs to take care of. Or the 20% down (in your example is $100k) could be in the market growing. Realtor fees if you sell the home after only a few years.

While I admit, in a normal market and for anyone who is in a "stay put" position, buying is going to be superior to renting. But this market is too bizarre at the moment for anyone to be truly confident that this is the new normal vs an anomaly - and I don't want to be the one holding the negative appreciation at the end of this.

[Need4Camaro]

I don’t think it’s entirely a new normal, but I also don’t think we will see pre-pandemic prices again. I think there will be more inventory but prices will most likely back down only slightly vs a sudden burst.