You’ve Lost the Bidding War On Your Dream Home
Enter the five stages of grief.
Enter the five stages of grief.
If you are trying to buy a house right now, you’re in the middle of a real-life Hunger Games. You finally find that perfect little house that you can’t live without, and there will be 13 other people who feel the same way.
That means you’ll be sucked into the worst possible outcome in any house-hunting scenario—a bidding war. Those other house hunters, like you, will do whatever is required and use all the weapons at their disposal to land the place. And when you lose, which you most likely will, you will watch your dreams—of backyard cookouts, of being able to get out of bed on both sides, of room to turn around in the bathroom without bumping your butt on the sink, of a kitchen in which your pots and pans don’t all have to live in the oven—evaporate. You will be gutted. You will grieve mightily, just like when [your childhood pet’s name here] got hit by a car.
The good news is that you will get over it, eventually. But first, you’ll have to go through the five stages of grief that accompany the loss of any bidding war. The stages start right after you stop swearing. Here’s what each stage looks like, plus some suggested coping mechanisms to get through them:
You didn’t really want that stupid house. It’s a stupid house. Forget that house.
You should: Keep saying this to yourself until this stage wears off. It’s the best you’re going to feel for awhile.
That house wasn’t stupid! It was awesome and you lost it. Why do you keep on LOSING?? Why can’t you ever WIN anything? It’s just like the high school state basketball championship that you LOST. And all those times you lost the lottery. Oh great! Now there’s a hole in the wall above the TV from you throwing your laptop in loser rage. Loo. Zer.
You should: Stop with the throwing. You’re going to be in your house awhile. But don’t repair the hole. That’s just conceding that you are never moving out. Go buy a painting to cover it up. It will take your mind off all the losing.
You are brilliant! Why didn’t you think of this before? You tell your broker to offer 5% above the winning offer, no matter what it was. Your broker tells you it was all cash, 30% over asking, included a new Range Rover, the buyers are closing on the property in eight hours, and their moving truck is already idling outside the house. “Face it,” your broker says. “You lost.” “NO!” you think really loudly to yourself. “You lost, broker person. YOU lost.”
You should: Drink and cry. But whatever you do, don’t watch HGTV. All those clueless, insanely picky, delusional, yet somehow winning house hunters will make you throw things at the TV, which you can’t replace because you need your savings for a downpayment. Theoretically.
You will never find a house. Just quit looking. It’s pointless. Why even bother? You’re going to be stuck in this dumb, ugly house for the rest of your life, looking at that terrible painting you just bought to put over the hole. You hate that painting. What is that even a painting of? An angry bee stinging a… a walrus of some sort? Is it even hung the right way up? It looks like a five-year-old drew it. It’s a stupid painting.
You should: Stop drinking and go to bed. Leave the picture alone. It’s hung properly. You maybe should have paid for a nicer one, or bought some fine art photography of the Eiffel Tower or a foggy Brooklyn Bridge. Deal with that tomorrow. If you have dreams about blowing up that house that someone else won, that’s a normal part of the grieving process.
Wait. That’s not a bee and walrus. It’s a flower in a garden. Now that the morning sunlight is hitting it, it’s not that bad of a painting. The colours go with the comfy chair. Like you planned it that way. You sort of like it now. You’re gonna sit in that comfy chair and admire your new painting, have a cup of coffee and take a quick scroll through the listings sites to see if anything came on the market overnight. You’ll use your phone, since your laptop is in pieces.
You should: Love the one you’re with. Maybe go ahead and fill in that hole. Keep the faith. Your house is out there. It might take you a year to find it. You might need to look at 100 houses or more. Maybe you’ll have to wait until this insane market crush has calmed down a bit. But you’ll find it. In the meantime, remember to be thankful that you’ve got a roof over your head, be that as it may.
Reprinted by permission of The Wall Street Journal, Copyright 2021 Dow Jones & Company. Inc. All Rights Reserved Worldwide. Original date of publication: May 13, 2021
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
Data reveals house values have continued to decrease, but the rate has slowed as the RBA Board prepares to meet next week
House values continued to fall last month, but the pace of decline has slowed, CoreLogic reports.
In signs that the RBA’s aggressive approach to monetary policy is making an impact, CoreLogic’s Home Value Index reveals national dwelling values fell -1.0 percent in November, marking the smallest monthly decline since June.
The drop represents a -7.0 percent decline – or about $53,400 – since the peak value recorded in April 2022. Research director at CoreLogic, Tim Lawless, said the Sydney and Melbourne markets are leading the way, with the capital cities experiencing the most significant falls. But it’s not all bad news for homeowners.
“Three months ago, Sydney housing values were falling at the monthly rate of -2.3 percent,” he said. “That has now reduced by a full percentage point to a decline of -1.3 percent in November. In July, Melbourne home values were down -1.5 percent over the month, with the monthly decline almost halving last month to -0.8%.”
The rate of decline has also slowed in the smaller capitals, he said.
“Potentially we are seeing the initial uncertainty around buying in a higher interest rate environment wearing off, while persistently low advertised stock levels have likely contributed to this trend towards smaller value falls,” Mr Lawless said. “However, it’s fair to say housing risk remains skewed to the downside while interest rates are still rising and household balance sheets become more thinly stretched.”
The RBA has raised the cash rate from 0.10 in April to 2.85 in November. The board is due to meet again next week, with most experts still predicting a further increase in the cash rate of 25 basis points despite the fall in house values.
Mr Lawless said if interest rates continue to increase, there is potential for declines to ‘reaccelerate’.
“Next year will be a particular test of serviceability and housing market stability, as the record-low fixed rate terms secured in 2021 start to expire,” Mr Lawless said.
Statistics released by the Australian Bureau of Statistics this week also reveal a slowdown in the rate of inflation last month, as higher mortgage repayments and cost of living pressures bite into household budgets.
However, ABS data reveals ongoing labour shortages and high levels of construction continues to fuel higher prices for new housing, although the rate of price growth eased in September and October.
What a quarter-million dollars gets you in the western capital.