Stunned Home Buyers Find the Bidding Wars Are Back
Excerpt:
From California to Florida, many buyers are increasingly competing for the same house. Unlike the bidding wars that typified the go-go years and largely reflected surging sales, today’s are a result of supply shortages.
The Wall Street Journal’s quarterly survey found that the inventory of homes listed for sale declined sharply in all 28 markets tracked… Inventories are declining for a number of reasons. Some sellers, unwilling to accept prices that are still down from their peak by one-third, are taking their homes off the market in anticipation of higher prices down the road. Meanwhile, investors have been outmaneuvering consumers for the best properties, often making cash offers that are quickly accepted by sellers.
In addition, some economists say that inventory levels are being held artificially low because Fannie Mae, Freddie Mac and the nation’s biggest banks have been slow to list for sale hundreds of thousands of foreclosed homes they currently own. The lenders slowed down foreclosure sales and repossessions after record-keeping abuses surfaced 18 months ago.
My comment: Watch for the appraisers to be blamed, as indicated in the third to last paragraph in the article: “Real-estate agents say an unusually high share of deals are falling apart because homes won’t appraise at the price that buyers have agreed to pay sellers.”
The only time a buyer gets to decide how much to pay a seller is when they are using their own money (cash). When you are using someone else’s money (mortgage lending), appraisers and underwriters have a fiduciary responsibility to assist the lender in risk assessment. Sometimes that means you can’t have what you want. Waaaahhhh.