Western countries, including the United States, have a custom of preferring to rent a house rather than buy and then own it. That hundred-year tradition was broken in early 2021. When Americans rush to buy houses. Especially the middle class and young people living in the city. Worried by the epidemic cutting off the supply of houses, plus the huge influx of cheap capital from the Fed pumped out to support the economy. Cash on hand, plus the FOMO effect makes Americans go crazy in the buying spree.
Alan Đức Nguyễn was told by his partner, Lucky Home Real Estate Agent in New Orleans. “Orders come in too many. It was so overwhelming that we had to refuse to take any more orders. Yet they (the homebuyers) flooded into the office. Many people hold piles of dollars ready to deposit. (It is rare for Americans to buy a house with cash – Author)”.
So how do you guys?
Petzuthy said: “It is unimaginable. We have to play the lottery. Only the winner will receive an entry ticket. There are thousands of people participating in this somewhat ridiculous game. A lot of people booed us because they suspected us of cheating. The police arrived and the crowd dispersed. However, in the evening they returned. Someone set up camp in front of my office.”
Covid has brought strange things. But this is really beyond imagination.
Vietnamese-born real estate lawyer Peter Tran laughed as he described the scene of crowds of people setting up large camps in front of a real estate project in Pennsylvania. Buying a house is like going to a festival. Some people put down a deposit on the house and also set off fireworks and opened champagne to celebrate.
Lawyers Tran and Petzuthy work 18 hours a day to handle the huge pile of documents. Real estate company operates at full capacity 24/24. The finished houses are transferred immediately, the difference is hundreds of thousands of dollars.
The situation is different now
Robert posted on his tweet that he has officially given up on the home buying journey. His tweet received tens of thousands of likes and comments. The majority of them supported Robert's decision and shared their similar decision. Unable to hide her sadness, Kshania shed tears when being interviewed. She and her husband have been struggling for five months now, fighting with thousands of people to get a home. She traveled to faraway Texas filled with hope. Her husband Ali travels the East Coast "house hunting". But they seem to have hit a dead end. There is no home for them. Some Dealers have promised to save the purchase price, but that is the high-end segment they cannot afford. As for the $500,000 range, even paying another $200,000 won't be able to buy it. Hundreds of thousands of Americans gave up like Robert and the Kshanias. In the face of the current situation of the Covid epidemic, which is exploding, their consumption goals are narrower. America is welcoming a boom in the real estate market in the defense. Many people decide to go back to renting. The buying craze in them has subsided. The chaotic crowd of the past is a thing of the past. The current supply is only for the rich. Millionaires who already have several homes continue to pay extra for new homes at exorbitant prices. They accept it because it is better than leaving a bunch of dollars waiting for inflation. Young Americans and middle-class Americans continue to return to renting and living the unfinished dream.
The US economy does not depend too much on the real estate market. Therefore there would be no move to support the likes of Robert or Kshania. But this does not mean a complete loss of opportunity. The market always has its own answers. Once the epidemic is under control and real estate business owners return to their main jobs, everything will be back in place.
Alan Đức Nguyễn - Real estate expert from Việt Nam