Quote:
Originally Posted by ranchlandsselling
Oh, I fully understand how that starter/midrange price range works. But, assuming someone bought a house 3 years ago, assuming the economic environment was exactly the same, there's really not much reason for a price increase beyond annual inflation. So, with everything being equal sure, some small inflationary gains.
But we're not equal. We're so gosh darn unequal it borders on ludicrous that the prices would be up over 3 years. I think it's stupid that a realtor would likely suggest me listing my place for $75k more than I paid.
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Possibly because of the slower and gradual claw back of the value? (Not questioning you, pretty much a Socratic question to answer your question)
For instance, when I first bought my condo unit for about $200k 4 years ago. Within 1 year it was worth 10% more than I paid (I knew someone who bought within 4 months of me at this price, same size and layout). Within 2 years it was worth 25% more at around $255k listing price.
Then it fell to 235k the year after and around $225k this past December. I recently "dumped it" for around $210k, but realistically, I got lucky and after all fees and whatnot, I should have been receiving around $200k.
Now that's what I've seen on my own property. I could imagine someone buying in 3 years back trying to get those same prices, but that's not what the home is worth. However, your example still seems like whoever is trying to sell is lagging behind nearly 2 years in pricing?
Based on my conversations with several others who own multiple properties, another thing they are doing is selling at a slightly outrageous rate. No sell, no costs. If they hit, they win. If they don't they're still renting out the property without issues/living in it. Essentially, they're seeing if someone will overpay for their nice unit so that they can take the cash and upgrade to a nice home in this market for free.
I have even heard of someone selling the home they live in, buying a condo unit (or plural) near downtown and then living in a friends basement for dirt cheap rent while reaping good rents on their rental properties and spending some temporary time enjoying their unit between renters.
IMO, the problem is that there are many homes on the market where the seller actually has no incentive other than overpayment to sell the property. I've also started meeting individuals who no longer need multiple properties to be a landlord. They are renters with a property they rent out. Kinda like an AirBnB set up, but all the time.
Quote:
Originally Posted by Tron_fdc
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I don't know much, but I'll chime in with what I know about China investors.
China house buying tours came about 4-5 years ago (just prior to CNOOC purchased Nexen). They literally came in groups of like 20 individuals buying homes like handbags (I went to a place the tour groups often ate and listened to the conversations. Fellow tour members were having a "bad day" if they bought 3 or less condo units/houses over their tour trip). Theoretically, they could sell at what they bought plus minor premium and still make money. However, as I noted earlier, I don't think there is an incentive to sell. They're looking to catch the next idiot investor or desperate buyer. But IMO that should not affect "normal" people selling at reasonable prices.