How to Buy in a Hot Housing Market

Money For the Rest of Us

J. David Stein

Investing, Investing Podcast, Business, Economics, Economy

4.5 • 1.4K Ratings

🗓️ 14 October 2020

⏱️ 31 minutes

🔗️ Recording | iTunes | RSS

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Summary

U.S. home prices are on fire and sales are skyrocketing. Here are 8 rules of thumb for buying a house in a hot housing market when there are multiple bidders over the asking price.

Topics covered include:

What are the latest metrics on U.S. home sales, prices, and valuations
Why are homes sales increasing and prices soaring and how likely are they to fall
Why David is buying a different house (again) in a hot housing market
What are rules of thumb that can help us find the right house without paying too much

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Transcript

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0:00.0	Welcome to Money for the rest of us. This is a personal finance show on money, how it works, how to invest it, and how to live without worrying about it.
0:10.0	I'm your host, David Stein today's episode 317. It's titled How to Buy in a Hot Housing
0:18.0	Market. I recently got an email from a listener. he's been listening about six months or so,
0:25.0	has listened to well over 100 episodes of the show.
0:29.1	He writes that he's relatively new to investing.
0:32.1	He's been investing for three years now as he graduated from
0:35.1	college in 2017. He's been saving for his first home purchase in Austin, Texas.
0:42.3	He writes the Austin Housing Marketing purchase in Austin, Texas.
0:43.3	He writes the Austin Housing Market is very hot at the moment, arguably one of the hottest
0:49.2	markets in the country, even with the recent effects of COVID-19. He points out that the year and there are 45% fewer homes on the market now versus a year ago. He would like to
1:06.4	buy a house in early 2021 but after seeing the market conditions he's worried that he might be entering the real estate
1:15.2	market at the wrong time. He has heard of stories from realtors and homebuyers about
1:20.0	individuals and families putting in offers of 10 to 15,000 dollars over the asking
1:26.1	price for homes that aren't even on the market yet only to find out they did not
1:30.2	win the bidding war.
1:32.6	In short, he continues, I'm wondering if you could offer some general rules of thumb to
1:37.2	look for as a first-time homebuyer in a hot market such as Austin. I'm conflicted because I don't want to buy at the wrong time and potentially
1:46.8	lose value in my home only after a few short years. However, at the same time, if this market
1:52.0	were to continue at this pace for several years to come,
1:54.8	buying in the near future I think might be the right move.
1:58.4	He points out he's tired of handing over his money to landlords and would like to start building
2:02.4	equity in a home to diversify his current return drivers.
	...

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