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Well, we lost out on #4. :(

Man-o-man, this is rough. The 3/1 house was put up for $595, but because it was so close to Atherton (1 block away), showed beautifully and was next door to new construction million-dollar plus homes, we knew it would go over asking. Everyone who saw it said, it would easily go for 650, it was that nice.

We figured that if there were 10 offers, there would be one or two clueless numbskulls who would offer asking or up to 650k. We figured the majority would offer over 650k up ot 700k to assure themselves a spot. On the far end of the spectrum, we figured there would be maybe one or two would offer 700 or 705. Given that analysis, we figured we needed to be aggressive and put in a complete no contingency offer at 725k. At about 8 or 9pm on the day our agent presented the offer (each agent was given 10 minutes, our agent's pitch stretched into 20min, which we thought was a good sign), we got a call from our agent on his cell phone. He said the seller's agent was on his other line giving us the opportunity to revise upward our offer. There were 16 offers, several w/ no contingencies as well. Counter-offer? Are you kidding, we had 10 minutes to make a split decision. What would make them happy, our agent asked. What would we be willing to go up to, their agent replied. What would they need, said we? Back and forth... Somehow the selling agent mentioned a hypothetical 750. Our agent asked us what our drop dead number was. We said 740. The seller's agent said, oh well, never mind. Wait! Wait! Ok, 750! 750! ...nope, too late. goodbye...

typical
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Why would the asking price of this house be $595?
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Why would the asking price of this house be $595?

To help incite the madness the original poster described. Auctions remove the time for critical thinking.

Hyperborea
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I just can't help thinking that the odd bubble in the Bay Area market is a sucker's rally - the tech wreckage is still not quite done - especially with the Bill and Carly show at HP still far from over. Having lived here all my life (family moved to Bay Area during WWII), I've seen wild bid-up real estate markets at least three times, and things always cooled down later. My own feeling is the following:

1. The best time to buy in the Bay Area is the winter, preferably in a
year when there has been Bad News in October. I bought my present place in 1998 in just such a market (the Bad News at the time was the Russian default, and there was a mini-recession which depressed real-estate prices for a few months).
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1. The best time to buy in the Bay Area is the winter, preferably in a
year when there has been Bad News in October. I bought my present place in 1998 in just such a market (the Bad News at the time was the Russian default, and there was a mini-recession which depressed real-estate prices for a few months).


Hey, I bought mine (San Jose) at the same time too!

I have to concur. The time between Thanksgiving and New Year is the BEST time to look at houses. Everyone is preoccupied with the holidays. I found my house in late November 1998, used the month of December to decide if this was the one, and made our offer the day after New Year. Our offer was accepted and it was below asking. Right when the offer was accepted, the housing market went into a frenzy because everyone was looking right after the holidays. By the time we closed on the house, the house value was already up $60K from our price.
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(SORRY - I posted once already due to hitting escape at the wrong moment)

Anyway, I just can't help thinking that the odd bubble in the Bay Area market is a sucker's rally - the tech wreckage is still not quite done - especially with the Bill and Carly show at HP still far from over. Having lived here all my life (family moved to Bay Area during WWII), I've seen wild bid-up real estate markets at least three times, and things always cooled down later. My own feeling is the following:

1. The best time to buy in the Bay Area is the winter, preferably in a
year when there has been Bad News in October. I bought my present place in 1998 in just such a market (the Bad News at the time was the Russian default, and there was a mini-recession which depressed real-estate prices for a few months). I expect that this will also be a Bad News year, so I'm looking to buy some income property in November.

2. In the Bay Area, avoid places which "show well". Do you want to spend $150K for a nice paint job and a bit of landscaping? I got lucky with my current place since the owners for some odd reason were selling it after a fire, while there was still construction repairs in progress. Naturally, this drove off the vast majority of buyers, as did the reek of old kitty peepee in the master bedroom. After ripping out the carpet and subflooring and replacing with hardwood, and getting the brand new roof which the insurance company paid for, I had a very cool house for about $75K under market.

3. (A bit of perversity) I actually think low interest rates are overrated as a guide to making buying decisions. I'd rather buy with a low(er) price and high(er) interest rates than vice versa, since you can always refinance the loan but you can't change the price (assuming a relatively stable and possibly upward trend in prices).

4. In the Bay Area, expensive houses are riskier than cheap houses. After all the great real-estate runups of the past, the biggest tankage was in houses in the $1M+ category, while entry-level and moderate houses held their value. The problem was that the big expensive houses lost their entire market when the economy tanked, but the entry-level places hold value since there is still something resembling a market even in the worst of times.

5. In the long run, Bay Area prices always trend upward. It is a simple matter of population and land - too much of one, none of the other. And while the occasional person runs off to Idaho or Chicago, there is still a vast stream of people moving in to replace them who don't want to leave. But, as John Maynard K once said, in the long run, we're all dead...

Just some random dumpage,



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Ah I love to read stories about bay area frenzies.

I put a contract on a house around Christmas 2001 that needed a bunch of Section 1 work, scared most prospective buyers away. Also there was some bad news in September that temporarily depressed the markets here.

Now the market has exploded again. It will be tough to hold on for 2 whole years.

--
whyohwhyoh
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