from Scripps Howard News Service Perhaps you have been looking for a house to buy this spring and find the pickings slim. You finally bid on a house and suddenly there are a bunch of other people in there fighting for it.
If it makes you feel any better, you're not alone, says a real estate columnist for Scripps Howard News Service. There is a shortage of housing inventory in many parts of the country this spring, according to James F. Smith, chief economist for the National Association of Realtors. And in some places, that is leading to incredible competition.
In San Francisco, the San Francisco Examiner found as many as 22 people bidding on one house and the lucky sellers got $659,000 for a house they had listed at $459,000.
San Francisco is an extreme example, but tight markets in many desirable areas have changed the behavior of potential buyers.
"People show up at open houses with checks in hand," said Jim O'Reilly, spokesman for the Greater Boston Real Estate Board, describing the market there as "white-hot."
In the Washington, D.C., area, "There have been many multiple presentations (of contract offers) and sometimes the prices do go above the asking price," says agent Denny Kaydouh of Weichert Realtors in McLean, Virginia. "In fact, probably the last half-dozen contracts I've written, if you write them the first day the house is on the market, you can get up to a half-dozen other bids."
But Kaydouh, who sells houses mostly in the $250,000-$450,000 range, said that the most any of her clients has bid above the asking price is a modest $11,000. She tells those who get too enthusiastic, "There will always be another house."
And she worries about first-time buyers eager to take advantage of the good economy. "There's such a frenzy to buy something that they're not really thinking too carefully," she says. "Some of them are jumping too fast."
Smith says that while the number of houses on the market hasn't changed much in the last few years, "housing demand has jumped dramatically" because of low interest rates, low unemployment and the "fat market."
"Now part of that is that a lot of younger people have gotten big bonuses from Internet companies or Wall Street companies or banking companies and they say, 'Boy, it's time to go buy a house.' " But the good news is that California is the only state where housing has become less affordable in the last decade, Smith says. Elsewhere, housing prices have not risen as fast as income, and with mortgage interest rates low, "a greater swatch of the population can afford a house today."
A point to keep in mind when you're looking for a house is that it won't always be like this. At some stage, sellers will again outnumber buyers and those who have overpaid for a house will take the hit.
Or, as Smith puts it, some buyers have "too much money and too few brains."
