In the most bombed out places, prices are rising fast thanks to all-cash buyers backed with investment dollars. Blackstone, American Homes 4 Rent, and Silverbay Realty Trust have made billion-dollar, all-cash buys in American cities.
Aggressive all-cash buyers have pushed out the homeowner, leading Yahoo Finance to publish a piece on how to compete in a hot housing market.
Suggestions are as follows:
- Get pre-approved
- Consider properties that might be overpriced
- Make a competitive bid
- Free up cash
This is fairly standard advice if your sole goal is to own a home, and by that I mean that you just want to own a home, no ifs, ands, or buts about it.
But what if you want to…you know, own a home you can afford? Borrowing money against investments to get a cash-out refinance at a later date, or bidding over the asking price doesn’t exactly seem like the best advice in the world. Using a line of credit to purchase a home would have backfired recently when the 10-year went to 2.6% from 1.6% in a span of one month. Bidding over the asking price just screams “I want to own a home no matter what.”
You can see the sentiment in the housing market changing in pieces like this. It’s as if the assumption is, once again, that the price of homes will only go up. Five years out from the financial crisis, 2008 no longer exists.