It took us a year and a half. To be fair, we relented on a lot of things that we wouldn't have in the beginning of our search (we're not afraid to renovate now, which opened up a lot of options). If we had always been as open-minded as we are now, we might have found something in late 2019 or early 2020.
On Monday, we locked at 2.875% on a 30 year fixed with like $1k in points, after originally being quoted 3.25% earlier in the day. Just had to show them what the online lenders were offering, and they got pretty close. Rates have already moved up about 1/8 point since then, so I'm glad we locked when we did. They also waived the origination fee and appraisal, even though we came in at 8% over list.
Opendoor gave us what appears to be a pretty competitive estimate, but we haven't moved forward. They don't know about our renovated bathrooms, so it's possible their number goes higher. We'll probably have the conversation with them, but right now I'm still thinking of testing the open market.
The market definitely feels frothy. Our budget went up $100k during our search, even though we don't have much more cash laying around than we did at the start. It's completely based on what we can sell our house for. Ignoring our renovations, it has appreciated about 50% in the five years we've owned it (half of that coming in the last 6 months). Compare that to the previous owners: they updated the kitchen, built a second deck, replaced probably $15k worth of systems, then sold to us for the exact same price they paid nine years before, just before the financial crisis. Or there's the townhouse we lived in before this house: it gained less than 15% in the five years my wife owned it, and it's up about 75-80% in the five years since (missed an opportunity there). Both properties are in north Raleigh, by the way.
You can't tell me this rate of appreciation is sustainable, but it doesn't seem like it's running out of steam anytime soon. And I don't see it going into reverse, just slowing down or plateauing at some point. The fundamentals seem solid and most of the buyers have the money to fund the offers they're making. That then leads to the question of, where is all this money coming from?
Personally, I'm looking at the Fed and all the stimulus that went out last year. And not just the stimulus checks that we all got... I'm wondering how badly the financial markets are distorted by the government printing money to buy assets, and whether that's now spilling over into the non-financial markets. Inflation is insane right now, especially relative to borrowing rates. The official line is it's a temporary blip, but I'm not convinced because so much money has been pumped into the economy. I think they're going to have to start shrinking their balance sheet and raising rates a lot sooner than they're saying publicly.
TL;DR: Everything's wild and your money isn't buying as much as it used to.
