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Comment by VWWHFSfQ | Hacker News Reader

I personally know of two parties currently trying to buy a house. The first is a young couple in New Jersey. The other is a retired couple in the Tampa Bay area in Florida. Both of them are extremely well-qualified.

Both of them have put in at least 3 bids on houses in the last year or so and every time they got out-bid by a lot. Imagine a listed house at $600,000. You offer $620,000. You lose and find out later the house sold for $720,000.

This is freaking New Jersey and Tampa, Florida. None of this is realistic. Why is it like this?

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You can't look at the asking price and assume it aligns with the current market. Often they will put low-ball askings to get more eyeballs on their listing. Their agent should of informed them of realistic offers.

What price was the comp homes being sold for?

It is actually insane

I just lost after putting a $1,325,000 bid on a $1,000,000 list price for a 1000sqft house

Edit, Zero added

OT, but I enjoy the hitchhiker's reference in your username :)

Well clearly you were an order of magnitude too low.

Edit>> they left off a zero in the first number.

Thanks! Now I get why my offers keep getting turned down =)

> Why is it like this?

It's like it because the house isn't actually worth $620,000. It's worth closer to $700,000, but if the seller underprices it, they are hoping that emotionally attached people with more money than sense enter into a bidding war, that drives the sale price way past its real value.

The best way to drive up the sale price for your house is to offer it for a bargain.

When looking at housing cost trends, don't look at listing prices, look at sale prices. Sale prices in that area didn't go up by 20% over the span of a week. If they did, those houses would be selling for trillions of dollars by the end of next year.

I saw a 2200 square foot house in Mill Valley, CA on Twitter this morning. It was listed for about $3M and went for $1.6M over asking. Over $2000 per square foot. On the other hand, the pictures seem to suggest it has the perfect Pottery Barn look that buyers want. One thing that the Fed report fails to consider is the cost, time and hassle of renovations. To get to that Pottery Barn look on a non renovated house would require at least a year and be very, very expensive (probably $1000 square foot just for renovations). Also, it doesn't seem like anyone in the most desirable neighborhoods is selling, as it is basically insane to sell when the houses are appreciating at 20% like clockwork. So you have a desperate buyer that has to pay $1.6M on the single perfect house to come on the market this year.

House details: https://www.zillow.com/homedetails/38-Sycamore-Ave-Mill-Vall...

At the same time Zillow managed to lose a billion dollars last year buying and selling homes (the so-called “iBuy” program that they were forced to terminate).

Something doesn’t add up? But maybe it’s just a question of most homes on the market actually not being desirable enough to get these high bids.

The bidding up is exactly why Zillow lost money. Algorithmic house buying suffers from the winners curse. When Zillow thinks they are getting a good deal, there are usually extenuating circumstances that are apparent to local buyers which cause them to not bid up the price. That and the iBuy program was expanded way beyond the original scope.

I was bidding in Los Angeles 10% over asking, but the sale price was usually 30-50% over asking.

I just moved to Chicago instead and got a place for 10% under asking...

I like Chicago, was it in north suburbs? Looking at two flats/three flats, everything there is quite affordable, but am worried about IL itself and cook county taxes.

The current governor has done an outstanding job getting the state's fiscal house in order, and neither Republicans nor Democrats are happy about it. But you can look at the numbers yourself and see that the state is doing very well.

Cook County... Well, that's a different story. The current assessor is following through on his campaign promise to clean up the assessors office and make property assessments modern and fair. And everyone hates him. If his reforms survive, the next step is to start a fight over how much everything costs. And then Cook County will be well on its way to fiscal health. If the reforms do not survive...

But you should also note that property taxes as a percentage of property value are significantly lower in the city of Chicago than suburban Cook County. Like a house in Chicago could be paying half the property tax compared to a similarly-priced house in Glenview.

It has been quite a while but that's good to hear, that was worrying back a few years for the state!

But that's also interesting to note that city of Chicago is quite cheap then unincorporated? suburban cook county, the thing of course is all the historical reasons why city of Chicago is empty, though as of late, Bronzeville and more south has not been so bad.

So many beautiful houses there that were/are still quite cheap, relatively and good property.

I'm not sure there is such a thing as unincorporated territory in Cook County. But consider that each skyscraper downtown is paying millions of dollars a year in taxes. There are a lot of large industrial sites in the city - for example, the factory that makes the Ford Explorer and the supplier park surrounding it - is inside the city of Chicago. It's a huge tax base; not to say that the city is better run than the suburbs or anything. Consider also that there is only 1 fire chief (and his salary and pension) for 2.7 million people, etc. The suburbs aren't sharing their administration staff with other suburbs ;)

No - Wicker Park. Love it.

My family isn't too far away, and I had a few close friends there, so it worked out surprisingly well.

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