Is this our market?
So, I showed a home to a client 2 weeks ago. It was priced at $144,900. It was a nice small home but in great shape. The comparable homes in the neighborhood that had "closed" were averaging slightly less than the $144,900. It sold for $158,900! Great for the seller. But what does this really mean?
A sale at over $14,000 of the list price, which is almost 10% over. So, if the new buyer has to sell immediately then they are upside down. I understand that real estate is only worth what someone is willing to pay for it but...come on. Or will it be that the new owner will be able to get another 10% over the price he/she just paid in a year or 2?
We all kinda believe in a "free market", but do we really believe that this trend will keep going? And what about the responsibility of a real estate agent to educates their clients that this is the "top" of the market and there is a high probability that home prices are exceeding the inflation rate and therefore it will take a few years to break-even. Is that conversation happening? Also, where are the banks and appraisers on this. Can appraisals keep going up? Can banks keep lending on over valued homes?