To get an insiders' view on the current crazy real estate market, San Francisco magazine conducted a comprehensive survey of 115 Bay Area real estate agents about "their work, their clients, and the state of their psyche." They dove into questions about all cash deals, tech buyers, foreign buyers, and houses that sell for way above asking. An overwhelming 92.1 percent of agents said that most of their buyers come from the local market, while 4.4 percent are from Asian countries, 2.6 percent are from another state, and less than 1 percent hail from countries outside the U.S. and Asia. Nearly half of all agents had only 1 to 20 percent of their buyers purchase in all cash, while 29.2 percent had 21-50 percent of buyers pay cash and 17.7 percent had more than 50 percent cash deals.
More than half of surveyed agents recommend to sellers to deliberately underprice to create a bidding war, and nearly half of agents say that "asking prices often seem totally made up." Agents are generally seeing final prices that are 6 to 20 percent over asking, and they're seeing buyers pay those prices primarily because "they had no other choice if they wanted to buy a house."
One agent saw more than 100 bids pour in on a property because it was so underpriced, while others have seen buyers offer sellers a vacation to Hawaii, a $5,000 gift certificate to a restaurant owned by the wannabe buyers, or stock options on a company that "really only had paper value."
But there could still be hope for all of those potential buyers out there. A whopping 84.9 percent say that the market can't keep going up and will level off.
· Handmaids of the Bubble [San Francisco Magazine]