Yet another example of what happens when a society treats a home primarily as an investment instead of as a place to live.
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Precisely, your home is not a piggy bank.
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something similar has happened in parts of austin, texas. i have an aunt and uncle who paid aroun $12,500 for a modest 3 bedroom/2 bath home in south austin in 1974. if it had kept pace with inflation it would be worth around $80,000 today. instead, zillow values it at $1,500,000 while the city of austin, restrained by legal limits on tax value assessments, says it’s worth $695,000 
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Meanwhile, we all know what hasn’t kept pace with inflation since the early 1970s … in a different way.
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Unless the buyer has all cash, a high asking price is useless. It has to bank appraise at the value it sells at for the bank to lend, or you risk the escrow falling out, that’s a huge head ache for both parties. When our tiny bungalow went for $25k over asking, I was very concerned that it would not appraise, but in the end it did. As for the pre-pandemic home we bought in Dec. 2019, it has doubled in value, mind you that we never intend on selling it, we love our hacienda, Dear Wife is happy & Papasan is happy too.
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i have a phrase which works for a variety of contexts of which this is one-- that’s just the system working as intended.
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Hoo, boy. Even when I was a crackhead squatter, a place like that would have given me pause.
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The POORS only revenge is to hunker down and purchase a home, it’s the only investment that can solve many of the issues waiting for you at the end of your working years, where my Dear Wife and I are now. The roof over your head is a weapon against the greedy f@ckers of the world, and likely to remain so for the foreseeable future.
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Especially since private equity firms are buying up homes (at 4:1 leverage) that individuals can’t afford in order to become the landlord to all those Americans under 40 who are permanently shut out of home ownership. As @navarro says, the system is working exactly as intended.
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So I hear companies are suddenly buying up houses by the thousands to drive people into renting forever. Or something.
How much is that mass buying by corporate land/overlords a factor in what’s going on with skyrocketing house prices? Did such a company buy this (shit)house?
Edit: I see gracchus more or less and just barely beat me to it.
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I had read the article earlier today. Another major issue is that the previous tenant posed as the owner and hired a crappy contractor to replace the roof, and of course it was done poorly.
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By my estimation [math], a move to a lesser economically viable place will likely play out better for those under 40 when they hit the golden years. Plowing it out in a major city with zero chance of controlling your financial future is a risk I would frankly not take any longer, those days are gone. There exists many micro cities in the USA that can provide, on many levels. You gotta do the research, you gotta do the math, it’s all on you my friends.
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In my neighborhood, people have been known to buy modest-sized houses, do a complete teardown, and put up a McMansion. It wouldn’t surprise me at all if the buyer of this does that. It’s the price of the lot that’s really super-inflated: what’s sitting on it is worth relatively less, and to some buyers, is worthless.
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Looking only at that RedFin site in the post, all the “comparables” are at least 100,000$ more expensive than this house. Paint, carpet, a new fridge, a settlement on the roof, some sheetrock - way less than 100,000$ even if you hire out the work. 12 months later, at CO appreciation rates, the house will be worth 12-17% more than the purchase price Plus the 100,000$, so there’s basically no way to lose money on this if you are a house flipper.
A recent article on the Denver area (I can’t find the link! arg) mentioned ‘out of staters’ looking to buy 10-12 houses at a time, hold them for a year or two, and then resell them for up to a 20% profit. The flippers didn’t even care if the homes sit empty for that entire time, bc they still make more than other investments.
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And then there’s this house in San Francisco: https://www.zillow.com/homedetails/152-4th-Ave-San-Francisco-CA-94118/15089577_zpid/
The pictures might give you pause, but what they leave out is that the last time it was occupied, it was occupied by a woman, her dog, a tenant, a lot of garbage, and the woman’s mother… who had died some seven years earlier.
A-yup.
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If it comes with only two dead cats $592,500 is a ripoff.
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And apparently she was a squatter who moved in and posed as the previous previous tenant, her relative who died. Wonder if anyone looked into that death. She did after all leave two cats to die in the bathroom apparently out of spite.
I imagine the absentee landlord is regretting hiring an absentee property manager.
The discount horror game music on the tour video was a nice touch.
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Hedge fund, hedge fund, hedge fund.
Even if it wasn’t an investor that made the $592,500 offer on this place, that’s what’s inflating the latest real estate bubble.
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