ARE BUYERS OVERPAYING FOR HOMES?
Do you think buyers are overpaying for homes in this market?
It’s a legitimate question because more than 1,500 homes have sold for $100K+ above the asking price in Austin, and 72 sold for more than $300k over. 4,535 homes have sold $25k to $99.9K over asking.
That’s a lot of buyers paying more than asking price!
But are they really “OVER paying”?
Most of us can remember the last housing bubble. I didn’t get my license until 2009, but I’ve heard plenty of stories about how easy it was to sell homes in the mid-2000s.
After the subprime mortgage collapse in 2007, many homeowners watched their built-up equity disappear overnight. By 2008, nearly 20% of homeowners owed more than their homes were worth.
Will that happen again?
No one has a crystal ball, but it seems unlikely that home prices in the U.S. will go down soon. In fact, most industry analysts are predicting the opposite!
So what’s the reasoning behind these predictions?
The number-one reason has to do with a shortage of homes for sale.
Housing supply everywhere remains well below normal. Inventory was pretty tight going into the pandemic, and only got more constricted due to an unexpected rise in people wanting to change their housing situation.
During the last housing bubble, a surplus of homes was built between 2000 and 2006. Today, we have the exact opposite problem!
So what do YOU think?
Is it really overpaying if home values continue to climb this year and next?
We would love to know your thoughts and predictions. Leave a comment and let us know what you think!