The other thing about the 70:1 buyer to house ratio…
1. Sellers can simply choose the highest offer even if it has a loan contigency. There’s virtually no need to worry about things falling out of escrow of a need to rush to close escrow out of fear of losing the buyer…Because if the buyer doesn’t perform, there’s 69 other backup buyers to choose from, lol…
Cash is trash unless you want to overbid on cash or totally leverage up the ying yang to participate in this game…As an investor, I don’t want to compete against 70 people looking for a home to live in…because since it will be an owner occupied home, they are more likely to spend a lot more money on a home even to the point of irrationality…
Also, with a 70:1 ratio, I’m pretty sure some new construction builders will stop with the traditional lottery system of determining who can buy a new home…It would make much more sense for the builders to auction off the homes and put them into a bidding war… Come on, builders aren’t dumb. There’s 14,000 applicants for 200 homes… The builders would have to be stupid NOT change the sales process to maximize their profits… Or at least what they will to is totally fully option out the homes and make the buyers pay for all the upgrades with the builder’s markup. Think limited edition car sold at MSRP, but fully loaded with options also at MSRP.
I mean, right now, it’s a total seller’s market on steroids, I think most homes are going well above asking. I forget where I read that statistics.
