Consumer behavior is crazy right now as banks are tightening lending restrictions and the industry is going through layoffs. I hear people driving up bidding wars for already overpriced homes.

What explains this behavior ? Desperation or stupidity

likehelpful
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First thing free money does is - throws economics out of the window. We will see lot more consequences of limitless money printing.

likesmart

This

Well-off people have more $ to spend after cutting back on vacays / clothes, etc. Interest rates are at record lows.

House prices are bid up. No surprises here.

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Are Fannie/Freddie tightening their qualified mortgage criteria? If not, banks will continue to happily underwrite mortgages and sell them to Fannie/Freddie or secondary markets.
2nd mortgages / Home Equity products are a whole other matter.

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MaRkEtS

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Boredom

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A friend is a realtor, just had someone go 100k over list price, egos seem to be at play here too

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Interest rates.

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Dunno but I just got a great deal on a house because I went under contract before three surrounding homes went under a bidding war each. $375k for me the others went from $475-550k, comparable on structure with a smaller lot

Reminder: free money pulls future demand forward

Yes & No - pulls future demand forward in shirt run but creates artificial demand in longer term.

I haven’t seen any tighter lending restrictions. They are all trying to get everyone to refinance. So not sure you’re rational there.

If everyone is at home now they want to buy a bigger house and people are leaving cities. Also the supply was already very tight before this. Add in cheap rates and boom demand exposition.

I think working from home also gives freedom to folks to live anywhere so people from Bay Area have been moving to Austin. Similar hot spots hit by high net worth or high earning people have become common. Price wars are on in RE

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Recently freed from the consulting game (starting end of next week) with a great severance and new energy around RE. Closed our first REPE fund last year as well as a sizeable personal portfolio in a large midwestern city, all on the side.
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