Been trying to buy a house because my rent is going up(and it will continue to do so) and a mortgage would be around the same as what my rent will become in a few years anyway so I figure I might as well build equity and have a house for my family.
Thing is the current housing market is nuts. Houses are put on sale with strict deadlines of "accepting all offers due 12pm 5 days from now" creating a false sense of urgency and to top is off the process is super opaque. You dont know what other people are offering so unlike an actual auction you cant start low and hopefully get a good value. Nope it's a black box and the asking price isnt of any help because that was just an advertising tactic to get more people to look at the house.
So you have to do research based on past history of other homes sold in the area of the same type recently and then place a competitive bid based on that. Of course everyone else is also doing that so you have to make your bid "competitive" and give a little more. How much more is hard to say and you only really get the one bid. So 12 pm comes along and the anticipation in your stomach is insane because this could be it you could be a homeowner and you did put in a competitive bid, and then sometime between immediately and just before bed you get a message saying they went with another offer.
ITS SO DAMN FRUSTRATING! Houses that I bid $30,000 over asking price and someone still swooped in and bid even more. And of course since the process is a black box you dont get told what bid beat you out or what the other bids were(dont want the 2nd place bid to decrease their bid in the event the 1st place falls through). You'll find out eventual final sale price a few months from now when everything finishes closing. I imagine the issue is other people got frustrated with the game over the last few months and now if they see a house thats ok they go all in with their max offer instead of a smart offer.
Oh and the market is limited, but somehow out of sheer coincidence after one round of sales is done the realtors manage to find another round of homes to put on the market. I'm convinced the realtors are limiting the supply on purpose and letting homes trickle in because the ACT NOW PUT IN THE BEST OFFER OVER ASKING tactic probably doesnt work as well if there are more than a handful of homes for sale at a time.
Its so frustrating I just want a house to live in and raise my soon to be born child, and Im willing to pay you what you're asking for it! The worst part is the housing market in my area shot up a lot over the years. So these people playing bid wars are making 100k profit AT LEAST for a house they bought just 5 years ago! And then theres the old people who bought the house for pretty much nothing 30+ years ago
Sorry for my long wall of text rant
It feels like a consequence of investment firms buying up more and more residential homes. The kind of crazy bidding mechanics and pressure to perform gymnastics as a buyer are not the way that normal human beings sell their homes, it's definitely a corporate influence.
Slate described the problem back in 2021 pretty well; namely that investment firms aren't buying everything but instead they're very focused on buying the affordable homes in growing areas. So in exactly the kinds of markets that young people would be looking (a place with a promising economy and still cheap housing) corporations are getting there first and leveraging their ability to take out bigger loans at much lower rates than normal people to just buy up entire neighborhoods with cash offers. And the behavior of realtors becomes toxic and cross-eyed because now they're players invested in that stupid game as well.
The way I got my house without too much craziness was because I live in a somewhat stagnant city and bought in a relatively unglamorous part of town. The house itself was great, a bit old but its core was in good condition. I am able to afford it because I commute one town over to where there's a decent job and I think that was low-key enough a connection to keep it getting gobbled up.
I think if you're an individual looking to live in a general area, you sort of have to think laterally to try and get out of the path of their algorithmic rickshaw full of money as it careens off towards the best opportunities. And of course there's always the influence of luck.
Its not even firms where Im from. A good chunk of the homes Im looking at were individual owned or occupied, I just think the realtors in the area have a nonaggression treaty to make as much money as possible. Obviously the supply cant be that big to start with if theyre doing this but the way these houses come and go is definitely convenient.
And the percentage of homes for sale is quite small compared to the total number of homes. So if investors are buying even a few percent of the homes, that can still be most of the homes that are for sale.