Two years ago our neighbors sold their home to their real estate agent, who immediately leased the house for a couple of years, and is just now attempting to resell it. I don’t know how much the real estate agent ultimately paid, but Zillow shows the house had a list price of $277,990. The current asking price is $559,900. You might think that the doubled price wouldn’t attract any buyers, but I’ve already seen a home inspector and other signs that the house might already be under contract.
My wife and I bought our house in 2016. Like the house next door, its value has doubled. I don’t look at that and think “wow, what a windfall,” because those gains aren’t real unless we decide to sell this house, and then either profit by finding something cheaper or improve our quality of life by buying something better. Neither of those are really an option in this market without serious compromises1.
If anything, this housing market reminds me of the movie Sliding Doors, in that I don’t think we’d own a house in a market like this. My wife and I have met multiple families who seemingly should be able to afford a house in this neighborhood, but instead are forced to rent. When the house next door was being leased, the rent was $1850. $1850 is roughly our mortgage payment. I am deeply sympathetic to these other families trying to settle down because their situation very easily could’ve been ours. A handful of years is the difference between my wife and me owning this house outright within the decade and paying high rents indefinitely.
Owning a house in this market doesn’t make me proud or happy. It makes me mad. I am mad for those families. I am mad because this will either persist and be long term horrible, or investors will get bored/scared and it will be short-to-midterm horrible.2
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There are a few retirees in our neighborhood who have been able to cash out and move elsewhere, to which I say “good for them”, but they’re an edge case. ↩︎
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Finally, I’ll add that this really cements my feeling that while hard work is certainly a component of financial success, hard work is easily dwarfed by some good luck. ↩︎