Hot Bidding

The housing recovery, from its worst downturn since at least the 1930s, has been steady, but much less robust than most had expected. There are many explanations offered, from mean banks who have tightened lending standards, to over-indebted households who have no capacity to borrow, to a societal shift away from ownership to renting. There’s probably some truth in all of these. But housing is picking up steam, and one of the phenomenon of previous bubbles, bidding wars, may be coming back.

This first graph (courtesy Redfin) shows the percentage of homes nationally selling above their asking prices: 23% last month, up 2% from a year ago, although still below the 27.4% peak reached two years ago.

The hottest markets are in the West (see below). In the Bay Area, a staggering 75% of homes are selling above asking price!

There are other data supporting a pick-up in housing activity. Building permits and existing home sales are both at their highest levels in 8 years. I don’t see these as bubble levels because we are coming off a low base. So, for now, I take these data as signs of a strengthening housing market.

• 9 Dec, 2024

  Fireside Reading

  Seven selections for your winter reading, including my Book of the Year. May you have a warm and enchanting reading ...

• 4 Feb, 2019

  Only the Lonely

  My first impression when flying into Mexico City a few weeks ago was its vastness. From the air, the city seems to ...

• 21 Oct, 2014

  Reversal

  Im interpreting the spike down last week and the strong rebound in the past few days as bullish. See the chart below ...