Oh my, how things have changed!
A couple years ago, sellers were ready to do just about anything to move their home, with some desperate enough to pitch in on closing costs or throw in a free Hawaiian vacation.
But with the Fed inflating the market again with its multitrillion-dollar monetary manipulations, selling is now the easy part. (Here's an interesting Forbes piece that looks at the new housing bubble that's taking shape.)
The problem is, once you've sold in this fast inflating market, you are suddenly out there with all the other chumps bidding against each other for a limited pool of decent homes.
Sure, you may be able to sell and even get a price you would not have thought possible a couple years ago, but will you truly be able to move up to a bigger home in the same town?
It's easy to figure out - just check out the listings. I have no interest in selling my now renovated and expanded Natick fixer-upper, but the houses I see coming on for a half a million are hardly any improvement on what I have now.
To move up, I would have to move out, say to Framingham or beyond.
In a fast inflating housing market, you don't truly get ahead and gains are illusory.
DrDoofenschmirtz, a regular contributor to the comments section of this blog, offered this tale of woe of giddy condo sellers who sold quickly, got a pile of cash, and then were forced to move out to the boonies.
I know of two families who wanted to upgrade this spring, and sold nice townhomes/condos (adequate size for their families), in order to move up, and into the dream of owning single family house. Both sold instantly, and were giddy with money they got. They were looking, originally, in their own town for kids and schools sake, but quickly realized they will need to expand their search into Arlington, Newton, Bedford and Lexington. Both were regularly outbid with buyers who were willing to forgo inspection and mortgage clause. Also, had lot more downpayment (30%-50% of asking price). Both families got screwed up. They are now moving far from the areas they wanted to live in order to secure housing. One is headed for Acton and another for Lynnfield. Their kids are old enough to be very upset about moving into complete unknown. Commute wise their lives will be lot more harder. I do wonder about luster of a single home and how fast it will wear off? How many who bid crazy this spring will wake up one day and realize how much they screwed up, once the reality of living in all of these places truly hits them?
Getting highest price on already overpriced property is not always what it is cracked up to be. Be careful what you wish for.
In this market, you had better look before you jump.
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