I was recently asked what is one of the favorite parts of my job as a Realtor? Certainly there are several very satisfying aspects, including providing tips about the home-buying process to new buyers, and sharing my knowledge about local architecture with people considering moving here from another area. But in this market, where inventory is so low, hearing offers on a listing is a real thrill. For one afternoon I’m in the envious position of receiving agents, listening to the stories of their buyers, and orchestrating the best combination of price and terms for my seller.

3416 Maple 10 smallWednesday I spent much of the day hearing offers on my listing at 3416 Maple Avenue in Oakland. We received six strong offers, and my experience was very similar to the chart in the next article. Even in this market, there tends to be one buyer who cannot afford the list price, but submits an offer anyway. But the top offers tend to be substantially over list. Beyond price, I’m looking for the best over-all package for my seller. Has as much risk as possible been shifted to the buyers’ side from the seller’s? Do I know and trust the agent, and the loan broker (assuming one is involved)? What is the likelihood that they would accept a counter offer on the terms that represent the greatest risk to the seller? Ultimately I’m trying to access which offer has the highest odds of actually closing the deal, and at the highest price.

I ended the day tired, but very satisfied that my presentation and marketing had attracted a great response to this home (19 disclosure packets out is indeed terrific!), and that my seller had received the best over-all result possible in this market. My seller sounded very happy. And when I shared a draft off this post with her, she corrected me: she was “ecstatic” with the results. Ultimately, that’s the aspect of my job that I enjoy the most!

Then on Thursday, tour day,  my moment in the sun is over. Time to get out and see properties, hoping there will be some matches for my buyers. Hope you all are enjoying the bounty of our Bay Area spring. I felt a little mean sharing with a friend in Alaska, where it’s -28 degrees, what’s in bloom in my garden: freesias, blue bells, lilacs, a profusion of Lady Banks roses, lots of orchids and a crabapple tree at its peak. No wonder so many people want to live here!

Take time to smell those roses!

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Common wisdom among male agents is that the market starts after the Super Bowl. I’ve always described the market opening when the daffodils bloom. That major commercial event just occurred — and my first daffodil just bloomed! So if this year is like most, we should start to see more inventory appearing very soon. As always at this time, I’m wondering whether the new market will be very similar to the past year.

So far in the East Bay we have been experiencing Econ 1A behavior: low supply and high demand=increasingly high prices. Two data points summarize the market in this six-city area: From Q4 2013 to Q4 2014 inventory was down 8% and median prices were up 16%. Last year at this time I predicted that inventory would rise in 2014, and prices would rise in the 5-10% range. So my first two predictions were proven too conservative! In the last quarter of 2014 new records were set for median sales prices in most of the cities in this East Bay region. Only in Kensington, with a very small volume, and Oakland, with a very high volume, are median prices still below the highs set in the 2007 pre-crash period.

overbidding history2014

The process of buying continues to require stamina and courage on the part of buyers. And the willingness to accept that in our area, the practice of pricing below market value to elicit over-bidding is simply the norm. Interestingly, as the list price increased, so did the percent on average that was required to overbid in order to get an offer accepted, with 24% being the average required  in the $1-2M range. Wow! Only when the list price exceeded $2M did that pattern change.

Affordability really took a nose-dive last year as prices increased. How the substantially higher prices are changing the demographics in Berkeley was one topic of a thoughtful analysis by our Red Oak Realty staff that just appeared in Berkeleyside. Written for that blogsite, the discussion referenced Berkeley specifically, but many of the concerns apply to all of our local cities.  We’ve all heard about the foreign investors outbidding locals; I personally didn’t see many of those in the mix here. But I did see quite a few homes being purchased by young, dual-income tech worker families, paying all-cash. This was especially common in Rockridge and North Berkeley, where the Latté Factor is high, and where there is at least decent public transit options, if not terrific ones in Rockridge. And we are feeling the continued pressure of San Francisco and Peninsula buyers of all ages and descriptions seeking relative bargains in our part of the East Bay.

Right now interest rates are about a half point lower than a year ago, likely to encourage even more buyers to commit to purchasing soon.  Last year I’d predicted that rates would go UP slightly–so I’m three for three for last year’s predictions!  So I think as the 2015 market begins I will just get ready for whatever it brings, looking forward to giving good guidance to buyers, and helping match them with homes that suit them in this wonderful area. And I look forward to representing sellers with enthusiasm, attention to the details, and excellent marketing.

Here’s the new market…same as the old market??

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Low interest rates plus low inventory ring in 2015

January 13, 2015

Happy New Year! I hope you had time since my last post to spend time with family and friends. Last week saw the first real tour of the year, but inventory is likely to remain quite low for the next few weeks. I met with new potential buyers between Christmas and New Year, and there was truly […]

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Giving Thanks for a Great Year in East Bay Real Estate!

November 26, 2014

2014 will be my most productive year in real estate. And so with Thanksgiving fast approaching here are some of the key things for which I give thanks not just this week, but throughout the year: –My clients. Each of my buyers and sellers had many choices of agents to guide them through their purchase, or […]

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The Autumn East Bay Real Estate Market: Intense and Brief

September 28, 2014

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 […]

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The East Bay Summer Market: Dynamic or in the Doldrums?

August 2, 2014

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 […]

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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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