Wednesday, July 12, 2017

Hopefully higher interest rates will stop some of this.

The truth of the matter is - we are in uncharted territory now.

"To wit, this example: Alain Pinel agent Mark Wong sent out an email blast Tuesday revealing that around 60 South Bay homes, mostly in Sunnyvale and Cupertino, sold for $200,000 or more over the asking price in the last 30 days. And he wasn’t necessarily talking about fancy schmancy places. One modest Cupertino house — 1,046 square feet — sold for $660,000 above its listing price." Source.

Randomly, here are a few of the numbers in Wong’s email:

A house at 1051 Heatherstone Ave. in Sunnyvale listed at $1,888,000 and sold for $2,370,000 — $482,000 over asking.

A house at 553 Croyden Court in Sunnyvale listed at $1,998,000 and went for $2,450,000 — $462,000 over asking.

A townhouse at 982 La Mesa Terrace, also in Sunnyvale, listed at $1,099,000 and sold for $1,400,000 — $301,000 over asking. For a townhouse.

"But this is not just a tale of those two cities. Agents recently have reported escalating prices in Mountain View’s Monta Loma neighborhood; priced out buyers have given up and moved down the road to Sunnyvale. Homes have been going for $300,000 over asking in Redwood City and — no surprise here — in Palo Alto."

MountainView in particular has added tons of new office space, and almost no new housing. So everyone is being pushed to surrounding towns.

I'm not even sure if a recession could tame this crisis. There just aren't enough places for people to live. I'm slightly concerned because when the pitchforks come out, they won't be rational.

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