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.

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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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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?!

gertude.roseFor the sellers the early spring market has also been gorgeous. On average, sellers in the area received more than 6% above their list prices; Berkeley homes closed more than 15% over list. So I am very proud that on both the buyer and seller side, my clients beat the averages! I had buyers who just closed on a wonderful view home above the UC Campus for less than 11% over list in competiton, and a set of Oakland buyers are currently in contract below list price. On the seller side, I must say I am still grinning from the result of my recent listing on Edith. I knew getting it to market quickly was crucial, and I judged correctly that updating the kitchen and giving the property a fresh look would pay big dividends. But even I would not have predicted such an exuberant response: 10 offers, four of them over $800K, and three of them were without any contingencies. The final result was a sale at 30% over lis t price, and a very high price for a property that shows as a 2/1 in public records. Would I have encouraged buyers to write an offer that high? I think I won’t answer that question, and will just keep grinning on behalf of my sellers!

After feeling like Queen for a Day, reviewing those 10 lovely offers, it was back to looking at homes through the eyes of my buyers. The market looks different through their eyes for sure! While we are seeing a bit more inventory in the past couple of weeks, the quantity of available homes is still very low. We thought our inventory was low last year, and this past month we had 18% fewer homes on the market than this time a year ago, making this an extremely difficult market for our buyers. And we seem to have a real dearth of options right around the median prices of all of our East Bay cities.  For example, in Berkeley, with a median sales price of $835K, last month there were just 17 Berkeley properties selling within $100K on either side of the median. Right around the median homes were selling 20-22% over list, with $/sq. ft. numbers in the high $500-high $700 range.

Last year at this time buyers were frustrated by the standard of overbidding: it seemed that they routinely needed to offer $100K over almost any list price to succeed. Now in 2014 that amount has jumped to $200K if buyers wish to have a fighting chance, at least on the most desirable properties in the most coveted areas where homes are listed close to $1M: North Berkeley, Rockridge, and now often Kensington as well. I just helped one of my colleagues review offers on a Rockridge listing, and in that case the winning offer was more than $250K and more than 30% over list. And in this case too, the successful offer was without any contingencies. That continues to be a common occurrence.

March Madness for 2014 brought us further changes from last year: we saw more pre-emptive offers. That means that buyers are wanting to jump the queue and offer either before the house is ready for market, or before the sellers have announced they will hear offers. Usually the buyer who does that needs to be willing to pay a considerable premium to succeed. A recent example involved a home in North Berkeley that failed to sell two years ago at $1.25M. Marketed at $1.495M this year, it frankly seemed priced high. However, after just one of the two planned Sunday opens, the sellers received three offers, and is reported to be in contract at $2.1M. But appraissal issues are hitting some of these examples of high over-bidding. Without an appraisal contingency, buyers may be faced with making up the difference between the appraised value and their offer with cash reserves.

We’re continuing to see a great deal of cash, but not so much around the medians for each city. I’ve been seeing all-cash offers for lower priced properties, especially condo sales. And we often see all-cash offers in the higher end. Now that it’s possible to refinance fairly quickly after a closed sale, many of those purchases may soon actually involve financing.

Another new record from our March Madness: the first *overbids* that exceeded $1 million! We knew that had happened in San Francisco starting last year, but not here in the East Bay. Last month there were two examples that created quite a buzz. One was a property in Piedmont that sold just over $4M, starting at a list price just under $3M. More striking was a home in the Claremont neighborhood, a large brownshingle property that went 67% over list, and $1,150,000 over list! Those properties both sold in the $900-$1,000/per sq. foot range.

But remember, these are the news-worthy stories. There are still homes selling at, and below, list. Those tend to be the less well-presented homes, ones that begin at too-high prices, or ones with one outstanding flaw. But the ugly ducklings may represent a good value. I always encourage my buyers to consider the ones that the crowds passed over.

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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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Architectural Lust for August 2013

August 24, 2013

Two North Berkeley homes provide visitors the chance to see some amazing details in wood and tile. Both are open tomorrow, August 25th, from 2-4:30 pm. The first is a home that will require a major restoration—and for the right person it will be a very rewarding project. Located on a wonderful block of Arch […]

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