Bay Area

[Hibryd]

Did anyone else go to open homes this weekend? We took a tour of half a dozen South Bay homes (in Sunnyvale, Santa Clara, Campbell) and every one was absolutely packed. We've never seen it this busy. We're used to running into one or two other couples or families if we're in a well-priced house, but this weekend... we've never seen anything like it. There were 10 pairs of shoes outside of one home, another home had one couple or family in every single room while we were there.

(I was feeling pretty good about our chances before this weekend; more than one agent has told us that while they were getting a lot of foot traffic, the offers were nothing but low-balls under the listing price. Now, I'd kill to know what we're actually up against.)

So, was it the weather? Was it everyone who had been pre-approved two weeks ago who wants to buy before they lose the 5% rate? Did anyone else see anything like this over their weekend?

[cdm]

On last one - pre-approval doesn't lock the rate, whatever was quoted 2 weeks ago is gone.

[keaton]

Perhaps touring open homes is the new version of a Staycation.  Funny as it sounds, I'm only half joking.

Anyways, on a more serious note; don't make yourself crazy thinking about the competition.  Most of them are going to tour every place but really only buy ONE.  I got so I recognized the people touring homes - everyone who was looking for something like what I wanted was at every location I was at. 

[Hibryd]

Uh, okay, if it's not pre-approval, what actually locks in a rate for 30-60 days? When you submit a contract for a house?

[Meghan]

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Hibryd wrote:
Uh, okay, if it's not pre-approval, what actually locks in a rate for 30-60 days? When you submit a contract for a house?

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Our loan officer allowed us to lock the rate after contingencies were removed and we were in contract on the house.  I assume that is fairly standard, but I'm not an expert. 

[Glenn]

A friend made the same comment about Seattle. Across the West Coast, we've never seen open houses busier.

[snappypants]

Open houses were this busy during the boom days. 

Don't forget about looky-loos and all the neighbors who just want to get a peek inside the house.  I'd discount almost 80% of the people at an open house since if you are REALLY interested you'd go during the week with your agent and be able to view the house in peace and quiet.

We went to an open house in Crocker Highlands recently that looked more like a block party...honestly the entire neighborhood was streaming out of their homes, strolling around the sidewalks and when we finally made our way inside the house it resembled more a large party than a 'for sale' event.  When we drove up the street I thought they were having a block family garage sale there were so many cars and people walking around.

Some people go to open houses for entertainment and in some of the more vintage/historic neighborhoods neighbors go to open houses just to see how the renovations were done.

Don't get startled by crowded open homes and a smart real estate agent will keep their cool and not get caught up in the 'attendance' factor.

[Smurf]

We also noticed the high turnout during our visits to open homes this weekend (South Bay and Peninsula).  I completely agree with snappypants, almost everyone out there were either neighbors, other realtors, or viewcationers. 

In the first area we visited (Belmont), there were three open houses within a few blocks of one another.  In order to allow time to feed our new kid, we got there early and parked at an intersection that was central to all three homes (could see all three properties from there).  The new kid got cranky and took forever to feed, so we ended sitting there for 40 minutes watching people come from the neighorhood and go from house to house.  Of the five cars that pulled up, three were obviously other realtors coming by for networking or whatever.  Only us and the families in the two other cars were actually shopping for houses.  We counted some sixty total visitors and only only six of us were clearly on the buy side.

[Bargain_Hunter]

Well, the only open house I went to was before I got an agent to open the doors for me.

[Kan]

I have also noticed this.  A lot of low quality buyers (have trouble with loans, low downpayment, cannot afford the payment/get approved if the interest rate is ~5.5%, need a high apprisal to support their high offer price but with low downpayment etc etc)  are looking at houses now.  They are even making offers to screw up the market.

I have been looking at houses in the Fremont Warm Springs area for a few years and I believe i know the area inside-out, and it was ridiculous.  2 houses - 46759 Crawford ($599k) and 48218 Conifer ($685k - now pending again for a 3rd time) have both went pending and returned to market for 2 times EACH.

The reasons were all over the place but in the end it always comes down to to the buyer's loan or the interest rate.  A lot low quality buyers are making offers but they cannot close in the end.

It will take a while before the seller agents realise this and consider lower-price offers which can close (ie lower price but 30% down with a >$417k loan) or the interest rate keeps rising and shake out all these "fake" buyers.

But right now, it's very frustrating for "real" buyers because seller agents will use this traffic to negotiate against you. 

I hold no grudge against the sellers.  But I am so frustrated at the other "buyers" who are screwing up the market.  They should just stay home and save instead of making offers they cannot close.