Why is real estate booming now?

[raccoon]

Why is real estate booming now? I've heard from several people, one of them in real estate, that it's very much a sellers market now. I've heard that about South Carolina's three largest cities. A house may go on the market one day in the next day you get several offers.

Any of y'all know about this? What gives?

[The_Casual_Observer]

1. In Los Angeles it's all about investors buying these up and renting them out.

[Johonny]

18. It's also about inventory

In Los Angeles there's little construction and little inventory on the market. I spent over a year trying to land a condo. You'd get 10 offers after one open house unless you were greedy in your price setting.

The economy is good in LA, but the new housing in most areas in limited.

[we can do it]

2. It's been like that a couple years.

Pent up demand. Low interest, prices reasonably low, low supply.

[Adrahil]

6. Yup. Econ 101.

OTOH, where I live, the economy is basically stagnant and my house is still worth less than what I paid for it in 2004.

[we can do it]

10. We sold our house in Ohio for what we paid for it in 2007 in a month.

Of course we did maintenance and a little freshening, but I was ok with that.

[Adrahil]

14. Fortunately....

I intend to retire in this house, so no big deal. It'll be a nest egg for our daughter some day.

Fortunately, even at the reduced price, I have significant equity in the house. I wish it were more, but hey, can't have everything!

[we can do it]

20. We were able to move to Rehoboth Beach after the sale.

Had purchased our home (in RB) a few years ago. Rented it till we could afford to move in full-time with our Ohio house sold.

[Adrahil]

21. Enjoy! RB is lovely! NT

[we can do it]

22. Thanks! Yes it is.

We worked extra jobs and hours, did without cable and a lot of junk to make it happen. Wife was able to keep job and work remote. I am amazed every day.

[Corgigal]

3. Happened to me

Sold my house in Summerville SC in two days with 3 offers.

No idea, I hated the place. I live in the blue area of Kentucky now, Berea to Lexington over to Louisville. Trying to buy a new house, not as crazy as SC.

Lots of northern people moving in, our old home was purchased by people from Connecticut.

[MineralMan]

8. To me, too, but back in 2004.

My wife and I sold at the absolute peak of the market in California. We had three offers the first day. We closed 30 days later on the offer that seemed the most likely to be able to swing the deal. Then, we moved to Minnesota and bought twice the house for half the money.

[Corgigal]

17. Man, that's sweet

We just got 17,000 over asking and paid off all old debts. Got a few grand in the bank for breathing room and going through the VA on a house right now. About 3 grand difference, but much newer with nice land.

You had the better deal but I did a lateral. More progressives all around us now. Feels better.
Hubby already on the civil rights commission, nothing like that in South Carolina.

[taught_me_patience]

26. The peak of the market was 2007 not 2004.

The market climbed another 30% after you sold.

[MineralMan]

4. Interest rates are about to go up soon.

That's why the buying frenzy. There's no way they aren't going to climb. When they do, people are going to be stuck with the house they already own, so everyone's frantically trying to move up (or down) ASAP. The boomers are downsizing and the younger set is upsizing. It's a very active market, which will continue as long as interest rates stay low. Then, it will all end. People are just trying to get stable before then.

[Adrahil]

11. I remember when people were getting mortgages for 15%+

I doubt we'll see those days again.

My first mortgage for my first house was a bit over 6% and I thought that was decent at the time. I think that's a reasonable rate.

I did a mortgage modification for my current house 5 years ago and converted to a 15 year mortgage at 2 7/8%. I agree that the rates HAVE to go up...

[Freddie]

27. Mortgage on our 1st house was 13.5%

In 1983. That was the FHA rate, market was even higher. We were delighted to refi at 10% a couple years later.

[Adrahil]

28. OOF!!! That's gotta hurt! NT

[Freddie]

38. The house cost $42000

And was on the market for a year, at that interest rate. Was a little townhouse in an iffy neighborhood, we moved 4 years later. Had we stayed the mortgage would have been paid off 15 years ago...sigh.

[Adrahil]

39. Less than 10 years to go on mine....

Looking forward to owning it outright.

[Not Ruth]

5. It can't last or it might last

The stock market is strong, which means that investors should be pulling out of real estate and adding to the stock market. Once the stock market crashes, real estate should boom.

[The Velveteen Ocelot]

7. A real estate agent I know said it's at least partly because

people who got underwater on their mortgages during the recession are still catching up and can't afford to sell yet, so there's not not enough supply to meet the demand.

[Hoyt]

9. Where I live the ones in the $200,000 range -- give or take -- don't last long and often get offers

above the listing price.

Potential sellers don't seem in a hurry to sell their houses. Perhaps they are hoping prices will continue to go up 5% or so a year (that's like living rent free and then some), or they are just comfortable where they are and at the mortgage payments that were established when interest rates were very low.

I'm considering selling mine and downsizing as retirement approaches, but not in any hurry except my ladyfriend wants to move closer to her kids.

[Stinky The Clown]

12. We get mail, quite literally, every day offering to buy the rentals we own

We own two entry-level rentals and our former home. All are being rented. None are for sale. And yet we get offer.

We now live on a tract farmland we own in a trust. We get offers on that, too, and that's odd. It can't be subdivided as it is in a agricultural protection zone preventing subdivisions. It can be used for some crops, but not all, or for livestock.

[Stinky The Clown]

13. We get mail, quite literally, every day offering to buy the rentals we own

We own two entry-level rentals and our former home. All are being rented. None are for sale. And yet we get offer.

We now live on a tract farmland we own in a trust. We get offers on that, too, and that's odd. It can't be subdivided as it is in a agricultural protection zone preventing subdivisions. It can be used for some crops, but not all, or for livestock.

[Warpy]

15. Dunno, I started to get "I wanna buy your house" postcards last year

for the first time since 2003-2004. This town never saw a bubble, contractors were slapping cheap houses up too fast for that (cheap referring to construction, not retail price). A lot of newer areas are still partly empty, thanks to investors snapping them up for a quick profit. They didn't lose anything so there they sit, absentee owned and rapidly going out of style.

So I don't get it. This is an older part of town and more businesses are closing than opening and we're already plagued with a Wally's Supercenter that drove the smaller grocers out of business, and it's a lousy place for a new superhighway. All I can think is that they're looking for rental stock for the airbase, which is fairly close.

[Sanity Claws]

16. Investors buying

A lot of foreign money is being laundered through LLCs and the LLCs are buying property alone or jointly with other LLCs. It is a big problem in NYC.

[haele]

35. Same here in San Diego. Either investors or cash buyers for the most part.

They snap up the fixers before a family that actually could afford it gets into escrow, and those houses either sit vacant or are resold within a few months at a higher price. A year and a half ago, foreign nationals (primarily Chinese) made up a good half the buyers.

At any rate, all those "forclosures" that were on the market four years ago are gone. And not to families or as owned residences - they're pretty much all rentals or investment properties.

Haele

[voteearlyvoteoften]

19. Almost no new single family built in last ten years

That's what's happening in Fl. Plus sky high rents if people buy they get so much more for the same monthly payment.

[MindPilot]

23. Not sure but I like it.

I owe about $345,000 on my house which according to Zillow could sell for $946,971 today.

[taught_me_patience]

24. Pent up demand from millenials moving out of parent's house n/t

[lostnfound]

25. Price to build new or remodel is skyrocketing; no immigrant labor

[SoCalDem]

29. Our SoCal house was sold to the first lookers

full ask.. Listed at 9AM..contract at 10:15AM..

we still owed 108k..sold for 315K...

[haveahart]

30. It's about the Russians and Chinese grabbing all they can while we are looking at their agent make

his fascist debut.

[Weekend Warrior]

31. 1) Banks have been loaning the money.

2) States like Florida have been setting up very large funds to subsidize down payments for first time home owners.

3) More people moving to many population centers creating demand.

4) Investors are doing very well.

5) Interest rates are still low.

[ProfessorGAC]

32. Not Happening Here

55 to 60 miles south southwest of Chicago
No such real estate boom occurring
About 2.3% per year, or a third of fairly safe portfolio money.

[Luciferous]

37. We moved out of Illinois in 2013 and I think we were lucky we sold our house as quickly

as we did. The first person to walk through made a full price offer. I think we would have a hard time selling there now since the town is in a slow decline.

[Thor_MN]

33. I have less than a year left on my mortgage and am getting swarmed with companies

that want to buy my house. The letters wind up in the trash on the way into the house. The messages on my machine may drive me into letting go of my landline.

[Coventina]

34. I get offers to buy my house almost every day.

Our area is escalating like it did right before the bubble.

[pnwmom]

41. I have gotten letters with a dollar bill inside, asking us to keep them in mind if we sell.

Give me a break.

[Coventina]

42. I really don't get it. If you sell, then you have to buy.

Unless you are planning on a serious down-size, it's not worth it!

In our case, our house is already less than 1000 sq. ft. We can't go any smaller!

[Luciferous]

36. We have very low inventory in our area. I hope it lasts a bit longer since we are looking to sell

our house in 6 months so we can move out of the south. Our first house sold in 4 hours, the second in 4 days with multiple offers. Keeping my fingers crossed we'll have good luck with this one as well!

[pnwmom]

40. One reason is that baby boomers aren't selling, so there's less product on the market.

I think I read that 53% of all houses are owned by people 55 and up.

In my city, they haven't been building new homes fast enough to keep up with the needs of the market.