A friend of mine was all psyched a couple of weeks ago when she signed a contract for a condo in the Culver City area. She had been shopping at or near the “low end” of the Los Angeles area housing market — $300k or less. I have heard from more than one prospective buyer that, at this price level, there has been a bit of a buying frenzy. Sellers are listing the homes for lowball prices in order to attract interest, and then buyers are bidding up the prices, offering cash, avoiding contingencies in their contracts, etc. And the federal $8k tax credit is bringing in a lot of first time home buyers, such as my friend, at this level.
But my friend’s excitement turned to frustration and heartache as her lender’s appraisal came in many thousands below her contract price. Continue reading Housing Market WTF