This is the state of the market right now. We went through the same thing. Had to put in offers within 24 hours or so of listing. At these sub-peak prices, many are jumping into the market. It took 14 offers before we got one accepted.

Now if those folks are all trying to close prior to the end of the tax credit Nov 30th or not remains to be seen. It would be ridiculous if they are all over-bidding to collect the tax credit when they overbid double the credit value just to get the house.

This isn't really a reflection of corruption, as much as it is a mix of all the factors in our current RE market. Keep a cool head and make the best decision you can is the best advice I can give you.

Good luck!

I was just thinking the same thing.  I started looking for my first home about six years ago.  I couldn't afford a lot, and we were in the midst of a housing boom where prices were skyrocketing like crazy (I could never understand why it would cost 3/4 of a million dollars to buy a decent condo).  I refused to do one of those Option ARMs... I never really understood them, and couldn't figure out why I was getting approved for a loan amount so much higher than what I could afford to pay back.  Being the responsible borrower, I was insistant on doing a 30 yr fixed.  As a result, I got priced out of the market and I never purchased a home. 

Now they say it's a "buyer's market," but all I see are short sales that take months to get a response on.  And the people who bought more than they can afford are living mortgage-free in these short sale properties that are so frustrating and seemingly impossible to purchase!  I just don't get it. 

Signed,

Looking for six years and still looking...

It's neither a buyers or a sellers market. It's a bankers market which makes things worse. The banksters are trying to recoup their bad investments in so many consumer unfriendly ways. None of the people who cause the problem are sitting along Bernie M at the greybar motel as they should, but are being bonused as they keep homes off the market to squeeze prices higher.  Short sales are simply foreclosures in waiting so those homes aren't likely to close ever. Sellers who did not use their equity as an ATM aren't able to get what they perceive as a "fair price". Those listings aren't on the market. Any reasonable deal for buyers is being out bid by speculators more often than not. I don't envy buyers in these shark infested waters right now.

Thanks for reading,

LoansbyJW

We are in the market of sellers who bought in the late 90's-early 2000's and missed out selling (or tried and couldn't) in crazy inflated 2006-7, but are truly profiting now that there is a big inventory of houses around $500k that people are fighting over to buy.  

What I don't understand is the over bidding that an appraisal won't cover. Or list prices $50k + over the recent comps. I looked at a house listed at $470 last week, and the highest sale price in the area in the last year is $430 for a house about 500 sq ft larger. Yet now there is an even smaller house across the street listed at $415 (which is totally the price those houses should be listed at) and everyone rushed in to give them multiple bids within 48 hours and it's already up to $450.

My realtor tells me I need to look at houses listed at $50k under my price range so I have room to bid up and win the house, and she's right! How crazy is that?  

It's the buyers who are over-paying that are inflating the prices. We all need to stop buying and stop over-paying. This is a game that we will NOT win.

It just goes to show that people are still fools. It was fools that got us into this mess and it's fools that perpetuate it.

Just hold tight if you can, this mess has a ways to go.

We got our home (a REO) because our agent is well liked and respected.  There were other offers on the table and the listing agent picked us because our agent works hard and is known for her transactions being easy and closing.   Here's the kicker of it all.  The listing agent said he didn't think the house would appraise for what everyone was offering and we could have the house if we lowered our offer amount.  It shocked us.   I would have expected him to hope for a miracle.   

Not only is it a bankers market, the bully on the playing field is the listing agent who is controlling which offers get sent to the banks and which don't.  And the listing agents like to see how high buyers will jump as they ask for more and more information just to determine who gets the house.    

I'm in the same boat.  It's an LA thing.  There are plenty of people who've been renting here in town and waiting for years and now they're buying. 

Also where do the people go who can no longer afford their more expensive houses and have to move out?  They're looking at 300-450 houses now...

Taxes are killing me as a renter and have been looking for 18 mos. and made 6 offers.  Finally in escrow... so it's possible!

But to make it happen...  I made a bid the afternoon after it came on the market, house was not even being shown yet.  All glass so just looked through all the windows.  Nuts.

Hang in, you'll get it.

And of course when the tax rebate ends (not eligible) and fall/winter rolls around many people will be less motivated so maybe it's best to wait.

Best of luck.