Are properties really selling over market value?

[Meandering]

Interest rates have been low for the past couple years

not couple
one


Pandemic fears and lockdowns further stifle the openness and competition. Got fully vaxxed folks walking around in masks?

How about them driving in their cars with their masks on.

Think they are running to buy a home where some one else used to live??????
Or are they just waiting it out?
eliminating the possibility of them creating supply within the market, thusly further limiting competition.

And oh my, if they let that eviction moratorium expire, what'll be "typical" about all that fallout?

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[Meandering]

They want to buy a house. The supply is low. It's nothing but supply & demand.
Again, those buyers can turn around and sell that house and make money. Sounds like a prudent decision to me. It's an investment. Often the motivation to buy a property.

Supply is low because it is being atypically constrained.

It's not an investment to over pay for anything.

There used to be a saying here, if it doesn't cash flow, it is not an investment.

yes real estate does decrease in value, we've lived through 2008 already.

 

[residentialguy]

not couple
one


Pandemic fears and lockdowns further stifle the openness and competition. Got fully vaxxed folks walking around in masks?

How about them driving in their cars with their masks on.

Think they are running to buy a home where some one else used to live??????
Or are they just waiting it out?
eliminating the possibility of them creating supply within the market, thusly further limiting competition.

And oh my, if they let that eviction moratorium expire, what'll be "typical" about all that fallout?

.

.

Supply is low because it is being atypically constrained.

It's not an investment to over pay for anything.

There used to be a saying here, if it doesn't cash flow, it is not an investment.

yes real estate does decrease in value, we've lived through 2008 already.

There have been ups and downs from the begining of time. Talking about suppressing renters and oversees buyers... more buyers will create higher demand = even higher prices.

 

[residentialguy]

I believe every point on the rise and fall of 2008 was market value of that date.

 

[residentialguy]

not couple
One
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Interest rates have been hovering around the 3 to 4% since 2012

 

[jay trotta]

Supply is low because it is being atypically constrained.

It's not an investment to over pay for anything.

There used to be a saying here, if it doesn't cash flow, it is not an investment.

yes real estate does decrease in value, we've lived through 2008 already.

Well that depends, look at all investment vehicles, are they overpaying some things in the stock market ? Are they overpaying for used cars ? Lumber and other materials ?
For RE we would need to look at building material costs right now, most have shot up 300-500%

Before Trump, it could have been viewed as an investment vehicle, a bit differently by generating a return at year end.

 

[J Grant]

Hi and good to see you back ! Here we are again lol

The definition of market value is most probable price WITH a set of terms for that price - a price unaffected by undue stimulus among them. Did a bidding war with 10 offers and decide in time pressure create undue stimulus affecting price ? It can. A bidding war can create a price that equates to opinion of market value, or a price over an opinion of market value .

There is no such thing for an appraiser as a formula of Market value = most probable price. There is a definition of most probable price, and there is an opinion of market value ( the appraisal ) USPAP - an opinion of value is an appraisal.

That's why it is: "My/our opinion of market value, as defined, is X $" ( as defined is the market definition used ).Your version is " My/our opinion of most probable price is X$"

RE Agents and buyers understand that due to bidding wars and low supply some prices can be above an appraisal market value. Which is why many of us are seeing sales contracts that either waive the appraisal value and buyer to pay full price regardless, or buyer will pay 20k or 10k ( agreed amount ) over the appraisal value but not more than SC price.

 

[J Grant]

Eventually, in most areas with some exceptions, in most areas prices don't rise forever. Buyers hit an affordability threshold qualifying for a mortgage, or interest rates rise or other.

A bidding war with 10 offers produces the highest one. That makes 9 other serous buyers who did not feel the house was worth such a high price.

 

[Zoe]

I believe every point on the rise and fall of 2008 was market value of that date.

You have the high cost of lumber too that is impacting MV. But I hear lumber costs are leveling out and maybe falling soon.

 

[J Grant]

I believe every point on the rise and fall of 2008 was market value of that date.

Lol you just appraised retrospectively every property that sold during 2008!