Our Autumn real estate market is much like the fall foliage: it’s intense, and doesn’t last long. For the next several weeks we will see an increasing number of properties appear during this concentrated fall market between Labor Day and Thanksgiving. Generally this is a good time for buyers, with the number of new properties mostly exceeding the number of new active buyers. Here is my prediction for the fall market: that list prices will be higher than we’ve seen recently, and that the difference between list and sales price will start to diminish. My guess is that we’ll see fewer cases of truly wild overbidding. But they won’t go away completely: I just heard of one on Marin, below the circle, that I hope will be a good sign for the new listing I’m working on above the circle, also on Marin. This one had lovely public rooms with original wood wainscotting, and a truly original kitchen (with a great Wedgewood stove on tall legs!). It was set somewhat back from the busy street, and had a flat back garden. Upstairs was less satisfying: mostly a sixties addition, a mix of finishes, and many aluminum windows. Listed for $1.050M, I hear it received 7+ offers and is in contract around $1.5M.

I’m delighted to have just gotten another buyer into contract with their first offer, and in competition. Even here in the East Bay, where many properties are receiving multiple offers substantially over the list price, it can be done! If buyers are clear about their goals and willing to follow my recommendations for conducting their due diligence while still making their offer attractive to the seller, they can succeed. And yes, lots of cash helps!

On my last listing, a three-bedroom home located near campus, downtown and Gourmet Ghetto but on a busy block of Oxford, six of the ten offers were all-cash. But interestingly, the successful offer was not one of the all-cash offers, nor was it the highest offer. I recommended that my sellers accept the winning offer based on my confidence in the local loan broker involved, someone I had used numerous times to represent my buyers. As it was, my clients accepted an offer $300K (35%) over the list price, and I was surprised that there was more than one offer in that range. But the high offer was written $200K higher still–but with risk.

The background story is an object lesson in the importance of “seriously local” – not just the tag line of my brokerage, but how real estate works here in the East Bay. Had the agent who wrote the highest offer been a member of our local real estate community, his clients might well now own that property. But he did not write the offer the way most Berkeley agents would write the offer, nor was it well-documented. It was written as all-cash, but in fact was contingent on the sale of another property. He expected that a very high price would rule the day, regardless of a very long inspection contingency (his was one of only two offers with ANY inspection contingency). He assumed we would counter out any unsatisfactory terms. But as I explained to him, I would never shorten a buyers’ inspection contingency. Denying a buyer a contingency that they have asked for in a contract has been the basis for numerous lawsuits. Buyers must be motivated themselves to either rely on the reports provided by the seller, or better still, do their inspections in advance of submitting their offer. That is what both of my last buyers did, and in each case they both were able to fully inspect the property, put inspection reports in context, and document to the seller that they had satisfied themselves as to the condition of the property. While it requires a commitment upfront on the part of the buyer, to me it’s a much more reasonable approach than simply waiving the inspection contingency. Better still: a more balanced market. Here’s hoping that’s what this fall market will bring!

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The second half of this year started off for me with a bang, and not just from all the fireworks in the area!  On the first of July I got buyers who are moving over from San Francisco into contract with their first offer. They fell in love with a bungalow in Temescal with tremendous original Arts & Crafts details, some of which had been replicated in a newer kitchen remodel. They faced tough competition, but even going considerably over list price, they felt they were getting a much better value in the East Bay than what they could have purchased in San Francisco.I was also pleased to have buyers be able to take possession of their new home in the El Cerrito hills just in time to see fireworks from their deck! My previous listing that I called the Treehouse Townhouse was one popular property! After sending out 26 disclosure packages, we received 11 offers. Listed at $510K, eight of the offers were in the $600′s, and four were $625K and above. Finding an attractive home well below the median price in Berkeley is a real challenge. My sellers benefitted greatly from the dearth of options–as well as from the Treehouse being private, ultra charming, and wonderfully close to amenities. So the view of the East Bay summer market from the perspective of my clients seems very warm, appropriate for summer.

1651 Oxford 09

I’m so hoping that my current listing, designed by J.W. Plachek for the grandparents of my sellers, will receive a similar response. It has great original details, a super convenient location, and a surprising deep back garden.  You can check that out at www.1651Oxford.com

As we begin the month of August, I can continue to share individual stories that make my jaw drop. There are still some “sexy beasts”: properties that have that “wow” factor that inspire remarkable overbidding. During the past two weeks there continue to be examples in North Berkeley, Rockridge and most recently in the Grand/Lake area. These are the properties that seem to have location, charm and condition, and inspire bidding of more than 50% over list. One of those didn’t even provide off-street parking, but it still received 14 offers and went 62% over list.

But sometimes our individual perspectives are quite different from the broader market picture. In my world, and that of my clients, lots of competition and over-bidding is still the norm. But in the six-city market I cover, inventory overall is actually up by 50% compared with this time last year. Sales are starting to slow. We’re hearing of more listings failing to sell and being pulled off the market. And one of the most striking data points I discovered was the percentage of properties that linger on the market beyond the normal marketing schedule. We usually have two Sunday open homes before hearing offers, so properties are on the market 14-16 days before a pending sale. I took a look at active inventory on July 2, and again today, August 2. Both months the results were identical: exactly half of the active properties in Berkeley, and almost 2/3′s of the properties in Oakland failed to receive any offers on their scheduled offer date. That’s a significant change from the early spring market. Are those homes not selling because they were priced too high initially, or just not terribly desirable for other reasons? Is this really a market shift? I noted with interest that a very high percentage of the homes in Berkeley that were still on the market after three weeks were listed by agents who are not from this area. “Seriously local” experience and expertise really does make a difference!

 

 

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The East Bay Spring Real Estate Market: As Gorgeous as the Gardens–for Sellers

April 27, 2014

Ah, spring! The gardens here in the east bay are looking so gorgeous, and the air is smelling so sweet with the fragrance of iris, roses and the late-blooming wisteria. Is it any surprise that so many people want to move here?! For the sellers the early spring market has also been gorgeous. On average, sellers in the […]

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Kitchens and Overbidding in this Early Spring East Bay Market

March 15, 2014

I’ve just been in the enviable position of representing sellers on a popular listing. We’re at the very satisfying finale: receiving multiple offers. I had two extremely busy open houses, and more than three dozen agents asked for the disclosures. By the end of the day we received 10 offers, all over list price. The […]

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Looking forward to an Early Spring East Bay Market

January 18, 2014

As we enjoy the guilty pleasures of a warm, extremely dry January, besides asking if it will ever rain again, I’m making my guesses about what the East Bay real estate market will bring in this new year. Usually January is a decidedly slow month. In the past I’ve told clients that the spring market will begin when […]

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Hot East Bay Market in the Midst of Cold Weather

December 11, 2013

As the weather turned cold our East Bay market heated up further as inventory shrunk. Lower inventory is normal given the season. What’s unusual is that buyer demand has increased, if anything, over the past couple of months. Right after Labor Day we saw a small deluge of listings, especially in the hills where I recently […]

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Keeping Out the Winter Cold

December 11, 2013

These past few days saw me wearing my down coat and gloves, and being very pleased to have heated seats in my car. How is the temperature in your home? If your PG&E bill just shot up like our real estate market, I encourage you to check out a cool FREE online tool for those of […]

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East Bay Real Estate Market Update: The Scary Story for October 2013

October 15, 2013

October brings thoughts of “ghoulies and ghosties, and long-leggedy beasties, and things that go bump in the night.” Real estate has its own array of creatures and crawlies. Some buyers are still frozen in enchantment by alluring spells: Waiting for lower interest rates: that spell was broken 6 months ago Prices will come down again: that […]

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Fall Events: Great Resources for Period Enthusiasts

September 26, 2013

Several Fall events provide great opportunities for owners of vintage homes, or for anyone who likes period details, to explore resources. BAHA’s Fall Lecture Series: Living with Arts & Crafts. A three-part series will be held at the Hillside Club, 2286 Cedar Street, Berkeley. Thursday,  September 26, at 7:30 pm: The Tiles of California Faience, Berkeley, Cal., 1913–1959 […]

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A Shift with the Season: Autumn Brings More Inventory to the East Bay

September 18, 2013

What a difference these past few weeks  have made! Summer changed to Autumn: there’s a discernible difference in the light and a crispness emerged in the air. And then there are the spiders–now it is indeed spider season! In real estate, especially in the Berkeley hills where I’ve been spending a great deal of time with […]

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