I will try to confine my comments to Canada and more specifically Ontario, Canada as that is what I observe 1st hand
Prices for most goods and services have exploded
However the house market has me a bit confused
I don't know of a house listed for x amount of money that hasn't sold for y amount over the asking price. Many times the over bid is huge
Example: Listed for 360,000 and sold for 560,000
Listed for 1,600,000 and sold for 2,400,000
Just examples of a red hot sellers market
My question is not the sellers market, most of whom have a good reason to sell, but who is all of a sudden in the market for a new house. I can understand the mobility of house buyers but they had to sell the house they previously owned. Who is buying the previous house,?? I think Tim is correct to consider a sale of his house when it is a sellers market and Tim will be a seller some day. Timing of the sale is the only consideration Tim might have. There has to be many more people considering the same question.
In addition, at least in Ontario many of these houses carry a 2 % floating int rate. Will Powell take the punch bowl away and int rates go up, just when Biden wants trillions for his new New Deal spending program?? Powell has said int rates will stay low for a couple yrs at least. Plus Biden will probably unload a lot of taxes on the productive segment of society. What do you make of Biden's plan for his new New Deal when inflation is red hot?? Just something to think about.
Disregarding 2 % floating int rates which do make home ownership more affordable but in fact just raise the selling price, which is sort of a wash or even more total monthly payments, which the buyers seem willing to pay. Are the house buyers doing the correct thing before the house might cost much more??
I know in Ontario people are selling for a million or more in Toronto, Ontario and moving further away and buying a cheaper house or even building new, depending on selling price, with money left over to invest.. But some body must have bought the house they sold, so isn't that a wash in supply and demand
So where in the heck is all this demand for houses suddenly popping out of the wood work
We have several development properties, within 50 mile radius, suddenly covered with new houses [50-100--200 or more in a development] Hiring a contractor for house repairs or an addition is impossible as they are swamped with work
Wandering away from houses, my son tells me new work orders is not the problem. Buying or locating raw product such as steel is the problem. Also skilled labour is at a premium. That is why my son is investing in more automation, robots etc.
Car dealerships used to have 10-15 new trucks on the lot are now at 2 or 3 new trucks given the chip shortage in new car and truck production. Plus the price is totally brutal. My truck bought 2 yrs old as a used truck is now worth more than I paid for it, retail selling price.
Where is this demand coming from. A 2000 cheque did not buy a house or truck.
Isn't this the usual formula for hyper inflation. Spend your money quickly before it buys less. Or is some thing different this time.
There are more buyers than sellers. You have 3-4 people bidding to buy a house, they start at the asking price and go up from there. The one who wants it most wins. And most houses are on the market for only a few days. I regularly hear of houses that sell they day the go on the market.
It can't last. I wish I were selling now instead of in 1.5 years. But we'll probably still do pretty well.
I had no idea the housing market was that bullish for sellers.
We have a 6,000 sq foot house that is killing us on bills, including almost 10K/year on property taxes with the kids long gone. but like you, we are probably 2 years away from being able to have it ready to sell.
Hopefully the market will still be hot.
Ours is a bit smaller at 4200 ft, but we're on a nice sized lot (just below 2 acres) in an upscale neighborhood where the lots are generally a little under an acre. +, we have a finished basement on steroids, essentially an aparetment with 1 bath, 2 bed and a full kitchen/nice living area. Made a great apartment for the kids when they were still here.
Talked to a real estate friend of mine recently about what it would sell for and it exceeded my wildest expectations. Very tempting, but we love the place and will sit it out for a few more.
Do you think it would bring more if "ready to sell" ??
A word of caution. If you do list it, maybe with a crazy high price. Be ready to move out as the buyer may have their own idea of your house being ready for them. You might fix it up and the buyer isn't interested in your remodelling
You just don't know what a buyer will pay for a house like you have [using your sq ft as a guide] I would guess a lot. In Toronto that is 4-6 million or more easy. Around here might be 3 million. My son has a good house on water frontage. 1/3 your sq ft and he thinks it would bring 3 million. Location adds to value. He is seriously thinking of listing and has a loft apartment in a bldg he owns to live until prices cool down. The gamble is what would a new house be worth in 5 yrs if he waited. Maybe a lot more and he would lose on his house investment
You could at least talk to a real estate person or do your own research and get some idea of similar house sale price. You could list it while you get it ready. You never know in a sellers market
I still don't understand this sudden increased demand for houses. The population of home buyers must be the same but all of a sudden the house buyers came out of the wood work, so the number or % of home buyers suddenly increased
Buy before the price is even higher as the supply is less than demand, materials cost more, seems to be the thinking.
Heck the cheapest replacement door lock and door knob for an outside door cost us 250.00 Most cost 400.00
My wife wants to do a kitchen remodel job. Just adds to the demand for small appliances. Everybody wants to spend money, my wife included, when she sees the price of corn. She wants her share. Who can blame her for what she wants.
I have a couple small loans I want to clean up.
Everybody has a different goal, all of a sudden. But most seem to involve spending money
Inflation??? How long can we trade paper fiat for imported goods
China has a different problem. Exports are so high their currency inflates. Our currency buys less.