Remember when real estate was so hot there were lotteries, bidding wars and desperate people making offers sight unseen? In some markets, they're back.
By Marilyn Lewis 5 hours ago
Perhaps you, like me, thought we'd never again see the kind of
madcap competition to buy homes that was common in the housing boom. I'm
thinking of lotteries, not to win a home but just a chance to buy one.
I'm remembering bidding wars and home shoppers so desperate to buy that
they'd camp overnight outside new subdivisions to be first in the door
the next day.
In some parts of the country, this kind of red-hot competition for homes, especially new homes, is back. Boom-era responses like camping in line overnight, homebuilder lotteries and buying homes sight unseen are making a reappearance.
That's how intensely demand is rising in some cities. If a picture speaks a thousand words, these nine spellbinding maps of U.S. home-price appreciation (a map for each year from 2005 through to today) tell the story of housing in the last crazy decade: from boom to bust to a second dizzying acceleration.
Lotteries fairer
So far, this the new run-up in prices is confined to a handful of cities and regions, particularly coastal California markets, Phoenix and Tucson, Las Vegas, Denver, Boston, Seattle, Portland, the Washington, D.C. metro and several Florida markets.
Authors of the CoreLogic Case-Shiller Home Price Index say prices rose nationally 7.3% in 2012 and could jump an additional 3% this year.
In Silicon Valley, few jaws drop anymore when a nice-but-nothing-special 986-square foot Palo Alto cottage like this one, listed at $1.25 million, inspires 20 offers and sells for $1.73 million.
Nearby, in the only slightly less-expensive town of Sunnyvale, 50 or so eager, prequalified home shoppers began camping out overnight for a chance to buy newly completed units in a 228-unit condo development.
To inject more fairness -- and less discomfort-- into the buying process, builder O'Brien Homes revived the boom-era practice of holding lotteries that gave winners the chance to buy. The two-, three- and four-bedroom condos initially sold for $420,000 to $620,000. But by the time the development sold out in April, demand had pushed prices up 32%, to $555,000 to $815,000, CNN Money reports.
In other Bay Area towns, Livermore and San Ramon, Calif., other builders are also resorting to lotteries to manage competition for their product. Such buyer demand is not confined to the Bay Area. Homebuyer lotteries also are cropping up in northern Virginia and in parts of Florida.
Tales of homebuying exuberance
Does these buyer frenzies add up to a new era of irrational real estate exuberance? Some say yes, others no. But, bubble or not, demand can get pretty intense as investors and buyers fall over each other to snatch up the few homes available for sale.
In San Diego, "major builders are requiring prospective clients to sign up on lists for a chance to buy a home," writes The San Diego Union-Tribune.
In the Portland suburb of Beaverton, Ore., this sweet but ordinary two-story, three-bedroom, three-bath home was shown 48 times in 48 hours.
"Another listing in the same area got four offers in its first four hours on the market," Redfin told Forbes. The 1,681-square-foot 12-year-old house sold March 28 for $295,000. It was listed Feb. 22 for $298,900, according to Redfin. The last time it was on the market, it was listed for $292,500 in June 2011 and sold in August for $10,000 less.
Forbes recently compiled examples of extreme buyer behavior gleaned from Redfin agents around the country. Among the wildest:
In some parts of the country, this kind of red-hot competition for homes, especially new homes, is back. Boom-era responses like camping in line overnight, homebuilder lotteries and buying homes sight unseen are making a reappearance.
That's how intensely demand is rising in some cities. If a picture speaks a thousand words, these nine spellbinding maps of U.S. home-price appreciation (a map for each year from 2005 through to today) tell the story of housing in the last crazy decade: from boom to bust to a second dizzying acceleration.
Lotteries fairer
So far, this the new run-up in prices is confined to a handful of cities and regions, particularly coastal California markets, Phoenix and Tucson, Las Vegas, Denver, Boston, Seattle, Portland, the Washington, D.C. metro and several Florida markets.
Authors of the CoreLogic Case-Shiller Home Price Index say prices rose nationally 7.3% in 2012 and could jump an additional 3% this year.
In Silicon Valley, few jaws drop anymore when a nice-but-nothing-special 986-square foot Palo Alto cottage like this one, listed at $1.25 million, inspires 20 offers and sells for $1.73 million.
Nearby, in the only slightly less-expensive town of Sunnyvale, 50 or so eager, prequalified home shoppers began camping out overnight for a chance to buy newly completed units in a 228-unit condo development.
To inject more fairness -- and less discomfort-- into the buying process, builder O'Brien Homes revived the boom-era practice of holding lotteries that gave winners the chance to buy. The two-, three- and four-bedroom condos initially sold for $420,000 to $620,000. But by the time the development sold out in April, demand had pushed prices up 32%, to $555,000 to $815,000, CNN Money reports.
In other Bay Area towns, Livermore and San Ramon, Calif., other builders are also resorting to lotteries to manage competition for their product. Such buyer demand is not confined to the Bay Area. Homebuyer lotteries also are cropping up in northern Virginia and in parts of Florida.
Tales of homebuying exuberance
Does these buyer frenzies add up to a new era of irrational real estate exuberance? Some say yes, others no. But, bubble or not, demand can get pretty intense as investors and buyers fall over each other to snatch up the few homes available for sale.
In San Diego, "major builders are requiring prospective clients to sign up on lists for a chance to buy a home," writes The San Diego Union-Tribune.
In the Portland suburb of Beaverton, Ore., this sweet but ordinary two-story, three-bedroom, three-bath home was shown 48 times in 48 hours.
"Another listing in the same area got four offers in its first four hours on the market," Redfin told Forbes. The 1,681-square-foot 12-year-old house sold March 28 for $295,000. It was listed Feb. 22 for $298,900, according to Redfin. The last time it was on the market, it was listed for $292,500 in June 2011 and sold in August for $10,000 less.
Forbes recently compiled examples of extreme buyer behavior gleaned from Redfin agents around the country. Among the wildest:
