Bewildered by the big real estate bubble

Admittedly, it’s a national problem, but one that’s especially acute here in New England. Home prices are soaring. Wannabe buyers far outnumber sellers.

For once, my wife and I hit this one right.

The place we just bought, as I’ve been saying, is in a remote location, and it needs some work. There are reasons potential buyers passed on it. As one I’ve met reacted, “It was more than my husband and I wanted to take on.” But thanks to our elder daughter, we have a vision, and, as we are finding, the place feels right. Besides, the bones are good. To our surprise, our bargain bid was accepted, so here I am.

And then, the city farm we just sold is in a very hot market. Readers of the Red Barn have been following some of the reasons – small-town pedestrian-friendly scale and New England character combined with proximity to Boston in one direction plus beaches and mountains in the other directions.

We watched as real-estate prices kept rising, buffeted by only one big downturn, and wondered how young couples and families could pay the mortgages. Well, rents were going out of sight, too, as are mobile homes. Around the neighborhood, the running joke was that none of us could afford to buy our own residences at the current prices. Only it wasn’t funny.

Covid, however, ramped all that up. Many people with professional jobs found that in working from home, they can live anywhere – and in working from home, they need a home office.

The real-estate collapse I had expected didn’t happen, thanks to the federal stimulus checks, extended unemployment compensation, and anti-eviction laws. Not to say there won’t be a delayed reaction.

Still, with Covid limiting a lot of ways to spend money – dining out, movies, travel, athletic events, concerts and theaters, for starters – there may be a lot of cash in reserve. Who knows if that’s a factor.

We had nine bids in five days, all above our asking price. Some were accompanied by love letters, even an excellent loaf of homemade bread, and selecting just one from that array was difficult. As was the disappointment of those who wondered what they’d done wrong.

Some of the push is coming from people from other parts of the country, who are buying sight-unseen, like the Texans with two Mercedes whose bid for a smaller property down the street was $65,000 more than the original asking price. That had a positive influence on our own property when it officially went on sale three days later.

So where are most of the hopeful buyers in Dover coming from now?

New York and California, we’re told.

Did anyone see that one coming? Or have a clue just where it might lead?

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