(OPINION) Michael Snyder – All over America, we are witnessing crazy bidding wars for the limited number of homes that are on the market. In many areas, the moment a desirable home goes on the market potential buyers start making offers that are tens of thousands of dollars above the asking price.
Not even in the days before the housing bubble burst in 2008 did we see anything like this. As I have discussed in previous articles, in some cases more than 100 offers are coming in for a single home. It is actually an understatement to call what we are watching a “frenzy”, and there are no signs that it is going to cool down any time soon.
The primary reason why home prices are soaring into the stratosphere is because of the giant mountains of money that our leaders have pumped into the system over the past 12 months. It took from the founding of the United States all the way to early 2020 for M1 to reach 4 trillion dollars. But from early 2020 to today, M1 has gone from 4 trillion dollars to 18 trillion dollars.
What our leaders have done is nothing short of economic malpractice, and it has pushed home prices to hyperinflationary levels. According to a new report that was just released by Redfin, home prices are far higher than they were at this time a year ago… Home prices are sky-high, and a recent report from Redfin underlines that point with some staggering data.
Median home-sale prices increased 17% year-over-year to $335,613 – a record high, per data taken from more than 400 metro areas during the four-week period ending March 28, 2021. And asking prices of newly listed homes rose 14% year-over-year to $353,500, another all-time high.
But those numbers only tell part of the story. Home prices are actually going down in many of our core urban areas, and meanwhile, they have been absolutely skyrocketing in desirable rural and suburban communities around the nation.
Let’s take a look at an example that is somewhere in between. In Sacramento, California a three-bedroom home that was recently listed ended up selling for 37 percent more than it did two years ago…
Less than a day after real-estate agent Andrea White listed a three-bedroom home for sale in Sacramento, Calif., in March, she received an all-cash offer. The buyer—who had not even seen the home in person—was ready to pay $520,000, Ms. White said. That was $21,000 above the asking price and 37% more than the seller had paid for the ranch-style home only two years ago.
That may seem like a nice little profit for the owner, but it is nothing compared to the returns that owners have been seeing in other parts of the country. Personally, I know quite a few people that have sold their homes for way more than double what they originally paid. At this point, only the wealthy can afford to buy homes in certain areas, because average Americans have been completely priced out of those markets. READ MORE
