It's impossible to buy a home in the US
Back in the day, there was an entire industry of people dedicated to optimizing your travel experience. They knew their territories well, and had the right mix of intuition and business savvy to plan the perfect trip or find the perfect apartment.
With the advent of the internet (Craigslist, Apartments.com, Zillow), these poor souls found themselves unemployed, and their disappearance has been palpable. I can't remember what it was like to be a rent before the 2000's but I'd wager it was an easier of experience then it is today.
People have a terrible time finding places to live or planning their trips, regardless of which website they are using. Yet curiously, people are still hesitant to return to the way things were and to go back to hiring agents. I assume its because agent fees are so expensive, usually 1 months rent. And once you do pay an agent, theres no guarantee they're any good.
In the meantime, I've found its necessary that I respond to apartment listing immediately. Anything that's been available for longer than a few days is already off the market.
All this to say, I'm convinced that the housing market is still ripe for disruption and improvement. If anyone is considering creating products for this market, whether for agents or buyers, I think there's a lot of room to make an impact. If technology is meant to solve a problem, then the housing market is a problem that continues to be a massive issue for most people.
As it turns out, the pandemic didn't push people out of the city. Even when people can work remote, they want to be close to one another for one important reason - to meet other people.
I don't know about y'all, but I've been trying to find a house for the last few months and its been hell. Every time I bid on a home someone else comes and outbids me for $50K over listing. It's absurd.
I'm not sure if its because people are looking to leave cities and move to the suburbs and so they are bringing with them enormous wealth or if this an issue of increased demand with limited supply (perhaps its both). But one thing is for sure, owning, affording, and purchasing a home in America is dam near impossible at the moment for 90% of people and I don't know if this is an issue that technology can solve or if it's an issue that is larger and more fundamental.
My understanding – being in a similar situation and following a couple real estate FB groups – is that everyone is going through this because real estate agents are advising their sellers to price homes below their value with the hope of attracting a large number of potential bidders, which creates a bit of a frenzy. This was the same strategy that used to be used on eBay – and was something they pushed you toward: "Set your minimum bid at zero, and you'll PROBABLY end up with more bids and therefore, a higher winning bid at the end of the auction." More eyes = more interest = perception of value.
So considering that, it seems like the right move now is to find houses that are 10%-15% below your expected budget and then offer that percentage over their asking price?
I am not sure I understand this post. This is not impossible to buy a home in the country, in fact, the market is really hot.
What is the problem you are trying to mention? I have a hard time finding a clear articulation of a problem here. Sure the market changed, prices changed. But what is the core problem here?
Same – it's like someone accidentally put two posts together into one.
The real reason housing prices are going up is because of inflation. All assets, and homes in particular. Building costs are also crazy right now due to inflation, timber and labor are skyrocketing too. Also, 20 years ago it was very tough to find potential buyers without the internet, so homes sold much slower
It is indeed very hard to buy a house nowadays because of low inventory, and you are not just competing with other consumers, there are also investment companies that are buying houses and then renting them out.
See this recent 60 minutes interview.
https://www.cbsnews.com/news/rising-rent-prices-60-minutes-2022-03-20/
"Gary Berman is CEO of Tricon Residential, a Toronto-based company that has quietly become one of the largest owners of single-family homes in the United States."
"Would-be home buyers may be forced to rent the American dream, rather than buy it"
Well said. We are looking for a place to live in Vancouver, Canada and it is the same issue. I heard the same from new Yorkers and even as far as Berlin.
There is a lot of room for innovation and the attention needs to be on the supply side. Making it easier for agents and property managers to do their jobs. If they start using it daily and it becomes mission critical then the renters side will follow.
Liv.rent does a good job in that respect.
The real problem is that even if you do find a spot you are interested in you need to give the broker or the home owner all your information. If they wanted, they could steal your identity. I doubt they would, because that'd obviously ruin their business, but it's possible and a bit scary when you are actually filling our a rental applications.
Another thing to note is that I don't think govt housing is the solution here. If America tried to build homes for everyone and then disperse them we'd end up with Khruslums like that have in Russia. The public sector is as stumped as the private as far as solution.
One person I know is trying to disrupt this space by building "tiny-homes" which to me resemble spruced up shipping containers. The idea is they can stack them on top of each other and they are relatively cheap to produce, so really anyone can afford one if they want one.
The problem with them, though, is that they're a new movement in the housing market so people haven't taken to them quickly. Some prospects I guess are saying they could be used to handle overflow patients in hospitals, but with corona being over in the US mostly, I'm not sure if thats still the plan.
Anyways, the point I'm trying to make is that disrupting this space is notoriously difficult because people aren't quick to jump on new trends when it comes to infrastructure.
I had an idea called "open to offers" which is basically saying... hey, if you gave me an amazing offer, I'd look at it.
Who's up for building that with me??
Take the agents out of the equation.
It's actually what a lot of RE investors do today. They just send mailers...
Still though... it's important to say that the current environment's main math problem comes from interest rates... removing 3% from the purchase price won't solve much.
It would possibly help with some the inventory issues.
Most of the money from RE comes from leverage (5-20% down...5-20x leverage) and interest rate arbitrage (inflation vs your fixed rate).
One specific thing that seems ready for disruption is the financing.
When a house sells for $X over asking price, it becomes a brick wall for people who are heavily relying on financing. You can only get a mortgage for the asking price, so if it goes over asking, that difference needs to be covered with cash. And some buyers don't have the $50k/100k/etc cash on hand to cover it.
Theoretically if the over price is the commonly accepted & stable "market rate" then the banks would update their estimates, but pretty sure that the banks are being extra conservative post 2008.
So anyway, there's a gap where some buyers are just locked out, even if they are ready to take on the liability. Seems like there is probably a solution there.
It sure feels unsustainable. My anecdotal experience makes me feel really bad for folks trying to find a house right now, it's hard. There is a fundamental supply issue, we just need more houses. Mortgage rates are higher and there are going to be lots of folks locking themselves into pretty rough monthly payments :(
We got super lucky two years ago and won a rather ridiculous bidding war for a small house in a nice, walkable, commuter town. Now houses in the same neighborhood are going for +100k, eventually the prices just don't make any sense.
Is anyone besides me okay with just renting indefinitely?
Probably the biggest downside is that there are some homes on the market I'd like the option to rent, but are only available for sale.