- Dozens of people in Silicon Valley camped out last week in hopes of buying a $1.2 million condo.
- The homes were listed at a fixed price, meaning there would be no bidding war.
- It's a symptom of a bigger issue in real estate today: demand is outpacing inventory.
- See more stories on Insider's business page.
As the real estate market stays white-hot, prospective home buyers are going to increasingly desperate lengths to win their dream home - even, it seems, camping out overnight.
Dozens of hopeful buyers in Santa Clara, California, created a makeshift camp outside of condo development Nuevo Homes last week, hoping to buy one of 18 available townhomes. The homes were listed at a fixed price of $1.2 million, meaning they were first come, first serve - no bidding war required, according to NBC Bay Area on Saturday.
"It's really hard to get a house in Silicon Valley and they're releasing only 18 today and probably most people in line know which lot they want," Nancy Reynolds, a local realtor, told the news channel.
-scott budman (@scottbudman) April 24, 2021
Jeremy Naval, another realtor, told NBC Bay Area he had been there since last Wednesday on behalf of a client.
"My client just really, really wanted to be the first one, so I promised him, I said, 'Whatever I have to do to get you the first one, I'll do it,'" Naval said.
The condos are built by local developer SummerHill Homes, which has built 70 developments of single-family homes, condos, townhomes, and apartments in the San Francisco Bay Area, according to its website. The Nuevo development includes 331 two-to-four-bedroom homes, plus retail and restaurants, bike paths, an outdoor movie theater, dog parks, outdoor space, and EV chargers.
According to SummerHill's website, 240 homes have been sold, equivalent to more than 70% of the development.
The frenzy to buy one of the Nuevo condos is a symptom of a bigger issue within the real estate world. Rock bottom interest rates and a desire for more space during the pandemic have lead many to want to buy, but inventory is reaching historically low levels. It's leading to skyrocketing prices and outrageous bidding wars: Last month, a 1,400-square-foot home near Sacramento listed at $399,900 received 122 offers in a single weekend.
The market for new-construction homes is beginning to feel a crunch as well.
New home construction rose to a new high last August, its highest since 2006, according to Department of Commerce data, but labor and materials shortages are beginning to hamper builders. Lumber, appliances, copper, vinyl, and cabinets are all in short supply, as is a small but crucial component used to construct basements. Tom Woods, a custom home-builder based in Missouri, recently told Fox Business that the shortage could be "catastrophic" for the industry.
"If you don't pour any basements or walls, then you're not going to build any houses," he said.