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Comment by WarOnPrivacy | Hacker News Reader

In 2021, the buy vs rent decision is a little like Should I buy a whale ranch on Mars or Venus?

I suggest that the decision whether to rent a house might want to take into account that each rental ad is getting hundreds of applicants, each day - with few new ads showing up.

ref: https://www.militarytimes.com/pay-benefits/mil-money/2021/07...

ref: https://www.amisun.com/2021/06/27/once-in-a-generation-housi...

ref: https://www.thedenverchannel.com/news/national-politics/the-...

ref: https://www.cbc.ca/news/bidding-wars-to-rent-a-house-in-onta...

Buying isn't any better with sales going to all-cash buyers who are paying way above and beyond market.

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Buying isn't any better with sales going to all-cash buyers who are paying way above and beyond market.

If that's the price houses are selling for, that is the market price.

Guess you’re not familiar with the concept of scarcity and outlier buyers.

A majority, or even a large minority, of sales cannot be above market price, by definition. If there are enough cash buyers that it's being difficult to buy at a given price, the market price is clearly somewhere above it.

You seem to be leveraging specific terminology in order to obscure the larger point - that buyers & renters are making substantially higher offers than homeowners are looking for. It is unclear how that helps move this discussion along.

You said ‘market price’ but you meant ‘asking price’ (UK) or ‘list price’ (US).

In volatile markets, sellers often set the initial price well below their reserve price to attract a bidding war. This forces buyers to make their own determination of market value rather than anchoring to the list price. You most commonly see this in markets where there is a lot of price volatility or supply constraints such that it is difficult to determine a priori what a fair market price is, which describes a lot of markets these days.

Most buyers know this and bid their estimate of the fair market price, which may be well above list and hopefully the reserve price. This is a sensible strategy when the seller has no idea what a reasonable price actually is but there is a large number of buyers.

Or, more simply, bubbles.

I suspect that was intended to mean "list price".

> If that's the price houses are selling for, that is the market price.

I'll rephrase it this way. Cash buyers are paying way above and beyond what the house was listed for.

Likewise prospective renters are offering rents above what is advertised.

Fair enough. Maybe this is a recent trend in your area, but in Vancouver people have started referring to asking prices as "liar prices" or "marketing prices" -- they're often set low to attract interest with no intention of actually selling at that price.

In my case, I bought a house last summer and offered exactly the seller's asking price -- which they rejected, countering $5k higher (which I agreed to).

Yeah, but people are listing low to attract more eyeballs.

I sold a place in the bay area 5 years ago. I knowingly listed it about $200k under what we expect it to go for based on comps. Huge swarm of interest and many buyers offering a price at around what we expected.

It's just a sales strategy.

> Yeah, but people are listing low to attract more eyeballs.

Any other year I'd accept that. However, that's unlikely to be true this year - in most US markets. Buyers and renters alike are bidding up properties because there is one property or less for every 100 prospects.

Here, landlords get 400 applicants the first day a rental is listed. The second day they get 400 more unique applicants. The rental we just moved into was up for less than 2 hours and received 50 applications. We won by paying 6 mos in advance + last + 1.5x security.

Look, you don't have to take my word for it, the data is public. Go look up the comps and you'll see they match. There's nothing to "accept," it's just a fact.

There have always been hundreds of prospects for each house sold. When I sold the aforementioned house we got roughly 500 people the first weekend and we were in contract after just a few days. It's been a hot market for a very long time.

Sellers set a low price because the price doesn't matter. It will be bid at the market price regardless.

Why would you assume it's to rent a house? It's a great time to be an apartment renter in big markets like NYC. I just got 2 months free on my lease renewal and I've seen even better deals out there but I didn't want to move.

Same here in Somerville outside Boston. There was a giant exodus last year due to COVID and landlords are desperate for any warm body even at a steep discount from the former rent.

Completely the opposite here in Seattle. The rental market is bonkers right now, with very little inventory in places where people want to live. That is very different to how it was just a few months ago.

At least in the part I'm looking at, this was still true at the end of May but is not even close now.

Isn't that the trick where the price looks good initially and then it goes up wickedly after 12 months because they won't give you free months when you renew?

The price can always be raised at the conclusion of a leasing period so there isn't really any unusual trickery involved. If anything the disclosure that the free months apply only to the first leasing period is less deceptive than raising the rent without any warning upon lease renewal.

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