Wanna buy this house? Send your résumé.
A headshot and bio is standard protocol to get an audition for a TV show or a play. But are they really necessary to buy a house?Skip to next paragraph
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They are in some neighborhoods of Los Angeles where, in addition to offering as much as $75,000 over the asking price, buyers are sending flowery bios, pictures, and letters to sellers.
"I just oohed and ahhed my way from room to room," read one letter to Jane Centofante, who was selling her 2,000 square-foot home in Westwood, a tony L.A. suburb, for a cool $1.49 million. "I gather from your [house] that you are warm and smart and bring incredibly beautiful detail to your world," read another. Ms. Centofante was stuck - deciding between the family who included a photo with their dog and the young screenwriter who wrote a flattering two-page letter - when other events put the sale on hold.
Welcome to America's frothy real estate market, where in some places enthusiasm and excess have reached a point that, to many, seems eerily similar to the dotcom craze of the late 1990s.
Of course, housing prices don't rise and fall like stock prices. They move more slowly and because of different dynamics. Still, it's hard to imagine the intensity of today's market continuing indefinitely, experts say.
"There is a conceptual limit that we have gone beyond," says Susan Wachter, professor of real estate and finance at the University of Pennsylvania's Wharton School. "And we are more vulnerable to price volatility. But complicating the issue is that there is no simple measure of a bubble."
Instead, there are anecdotes that would have seemed unbelievable 10 years ago. For example:
• Bidding wars in California are forcing real estate agents to write recommendations on behalf of their clients who are attempting to buy a new home.
• Real estate trade groups in Massachusetts are calling on state officials to approve more housing construction to improve prospects for buyers.
• Retirees moving to Florida are living in hotels for weeks and even months at a time as they scour the state in search of affordable places to live.
Most baffling to economists, and even those who reject the notion of a bubble, is that the supply of homes for sale continues to dwindle in places like Florida, southern California, and Massachusetts. Thus, there is no clear sign that the real estate market has peaked. All of these places experienced double-digit increases in home prices throughout 2004, some repeating their cloud-piercing performance for the third consecutive year.
In February, the median price of a home in Florida rose 25 percent to $201,400 when compared with the same month a year ago. The West Palm Beach-Boca Raton area of the state continues to register the biggest leaps in home prices, climbing as high as 34 percent in the fourth quarter of 2004.
Multiple bids keep coming through, says Marilyn Jacobs, who sells homes in Boca. And more often than not, her sellers are rejecting a lot of people.