Rising Bay Area Home Prices Ignite ‘Aggressive’ Buying Behavior
Bay Area Home prices are skyrocketing at a rate unparalleled by any other region in the country, causing potential buyers to up their crazy. The median home price jumped 33% to $550,000 in June, which is the largest jump in twenty-four years.
So, why the surge? Three reasons: tight inventory, super low mortgage rates and near-record levels of investor purchases. Andrew LePage of DataQuick notes, “Now all three factors are changing in a way that suggests these kinds of price increases won’t continue for long.” Sales fell in June, thanks to rising interest rates and little inventory for this time in the buying season.
Essentially, the only reason home prices are up so high is because there is so little inventory. That, mixed with investors buying up properties for $25,000-$50,000 over asking price, are creating a trend that just isn’t sustainable.
No wonder buyers have begun using aggressive tactics to score their dream home. Tactics like overbidding to win a home and sending handwritten pleas are just a couple ways buyers have been trying to up their game in the market.
In order to get the home they want, 25% of prospective buyers said they were willing to pay 1-5% above the seller’s asking price, says a recent survey from Trulia. Also according to the survey, 30% of Millenials will outbid, borrow and make personal pleas to get the house they want, much higher than their parent’s generation.
The market continues to take on a life of its own. What do you think of these aggressive buyer tactics?