Use LAUGHtivism or HACKtivism to protect homebuyers from overpaying in BLIND bidding wars?

It’s April Fool’s Day again, a favorite opportunity to poke fun at #GamesREAgentsPlay and irrational exuberance in real estate.  Each year we ask, how can Buyer Agents & consumer advocates use LAUGHtivism or HACKtivism protect homebuyers from overpaying needlessly? This year, Saturday Night Life got in on the action a bit early, with a salacious look at pandemic-inspired real estate fantasies that’s been watched 5.4 million times on YouTube.

How can we use humor to debunk recent news stories that sensationalize BLIND #BiddingWars?

First, the facts — actually the spin.  In the past, RealEstateCafe used the Hashtag #RESpin, but this year we’ve begun using the hashtag #REHypeCycle because we’ve not seen this kind of sensationalized coverage since 2014 before the Fed raised interest rates to cut off irrational exburance.

Here’s a sample recent stories, with a bit of PG-rated humor:

Beyond the humor, our preliminary analysis of MLS sales during March across Massachusetts puts bidding wars into perspective:

It’s too early to tell, but will be eager to see if the local real estate press also sensationalizes bids $200K over asking price when only 17 happened in Massachusetts during March while ignoring the 77 markdowns that exceed that amount? Would you believe that six buyers saved more than $1 MILLION off the original asking price — including three buyers who saved more than $2.1M off? That appears to continue this unreported trend:

During the 13 month period from 1/1/20 to 1/31/21, 9.1% or nearly 1 in 10 purchases $2.85M plus across MA saved #1M_Off.

In contrast, 7.4% or just 44 people across MA paid #100KOverAsk in that price range.

https://twitter.com/RealEstateCafe/status/1357125210827350018?s=20

During the last boom / bust cycle, #RealEstateCafe used it’s background as city planner and market feasibility consultant for developers to create Bidding War Scorecards.  Here’s an example of how homebuyers who are willing to time the housing market can use them to inform bids.

However, we’ve never limited the scope of our work to individual clients.  In fact, five years ago, our blockchain proposal to use blockchain to end blind bidding wars won the audience vote at an MIT Hackathon.  We don’t have the tech smarts or deep pockets to develop that presently, but we would like to present bidding war victim stories to the Attorney General in Massachusetts — Got one?

https://twitter.com/RealEstateCafe/status/1377628948444614658?s=20 (Share via social media)

Our goal is to reform the BLIND bidding process that manipulating homebuyers into overpaying needlessly, as is the case in BLIND bidding wars in Toronto too.  Thank God, CNBC’s high profile real estate correspondent Diana Olick is asking if it’s time to call another Housing Bubble.  Experienced buyer agents who’ve been through boom / bust cycles have seen #GamesREAgentsPlay and know that being misled is no April Fools Day joke.  

How quickly can housing markets change?

It’s impossible to predict with certainty, particularly because of supply / demand distortions caused by the pandemic. Still, strongly urge readers to consider this FLASHBACK from 3Q2019 when Redfin reported that bidding wars plunged 45% despite the lowest interest rates in three years. Hope that causes local homebuyers to order a Bidding War Scorecard before they overpay this Spring and join the nearly 70% of Millennial homebuyers who had buyer’s remorse before the pandemic.

https://twitter.com/RealEstateCafe/status/1169687159915331585?s=20 (Share via social media)

Related Articles

MIT Professor: Housing prices could decline another 20%

Savings of $100,000 or more on individual home purchases were relatively common across the top 25 most expensive housing markets in Greater Boston in 2006, and according to one MIT professor, savings are likely to continue in 2007.  Professor William C. Wheaton predicts housing prices could decline another 20 percent in Greater Boston and other markets over the next two to three years.  Does that mean that homebuyers in the most expensive communities will see even more price reductions in each of these categories in 2007?

PARTIAL MAP of homes selling for more than $100,000 below their original asking price: (see technical note below)

As sales prices fall, well-informed sellers are could set more realistic prices so the gaps between the original asking price and final sales prices may not be as wide as those recorded in 2006.  We’ll continue to map the location of six figure savings, and invite you to do the same on The Real Estate Cafe’s award-winning interactive bubble map.  We’re so convinced that our clients will save money, we’re willing to base part of our compensation on it.  Contact us at 617-661-4046 or RECafe [at] Mac [dot] com for information on our experimental NEW fees and rebates options.

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