This week I got a taste of how hot this seller’s market is getting. I showed a home which had so much deferred maintenance that even the exterior trim was rotting, yet it attracted four competing offers, two of them over the listing price, which the listing agent himself agreed was not justified by comps. He explained that the bankruptcy trustee handling the sale had observed the overbidding of new listings and wanted to try the higher listing price.
Meanwhile, another agent called me because she is about to list a foreclosure that I had listed for $290,000 several years ago, before foreclosure — and it didn’t sell then. Now the home was in even worse shape, and the agent wanted my advice on what price to list it at. I had to say that it would probably sell easily for $290,000 now, despite its much worse condition.
The agent, who specializes in bank-owned properties told me that Fannie Mae is now routinely listing their foreclosures at $30,000 over the prices recommended by the brokers it hires to give BPO’s (broker price opinions). They, too, are sensing this seller's market.
Apparently, appraisers are going along with these greatly increased valuations, but double-digit price increases can, over time, create a housing bubble that will only burst later on. Slower appreciation is much better for a market.
Like other showing agents, I’m warning buyers that homes are “flying off the shelves,” going under contract with multiple offers as soon as they’re put on the market. The statistics support that statement. Of those current listings on the market 10 days or less, 23% are already under contract. Of those put on the MLS less than a month ago, 39% are under contract — and 137 of those have already closed (mostly for cash), 52 of them at full price, and 26 of them above their listing price. [Statistics gathered on Monday, Feb. 11th.]