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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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 nothing to show them! As an example, right now in Berkeley, Albany and Kensington combined there are only five active properties listed between $700K and $1M. In all of Oakland there are only 31 active properties in that range, and most of those have been sitting for some time. But by the time you read next month’s post I will expect the market to have come out of hibernation.

Interest rates are back to nearly historic lows

Interest rates are back to nearly historic lows

I’m predicting that this will be another active year, with a new wave of buyers urged on by very low interest rates. The average interest rate on 30-year fixed-rate mortgages fell below 3.75% last week. That’s the lowest level since May 2013. For the same week a year ago the average was 4.63%. Rates on 15-year fixed mortgages have slipped below 3%. So if you’ve been thinking about refinancing, this would be an excellent time to take action!

January is the month when so many people vow to take on major projects and this is a great time to get prepared. If you’re thinking about buying or selling this year, or know someone who is considering such a move, of course I hope you’ll give me a call so that I can help you achieve your goals. A couple of important steps to consider:

  • Talking with a lender: Getting your credit and financial affairs in order can take a few weeks or a few months depending on your situation. Meeting with a lender far in advance is a great first step to help determine what you can spend.
  • Investigating tax implications: While as a Realtor I can walk you through the details of a purchase or sale transaction, tax ramifications should be referred to your accountant. Selling or buying a home can have significant tax implications so it’s a great idea to get answers early in the process.

I’m starting off the year with a new group of agents to mentor. Red Oak Realty has hired six brand new agents, the first time in many years that has happened. They all are sharp, motivated folks with previous careers, and a passion for real estate.  I serve as their guide to the industry, teaching them best practices.  It’s exciting to influence a group that has no bad habits to undo! And I know that I will learn from their questions. It is a good challenge to be forced to explain how every aspect of real estate works. Wish me patience! And I send you my best wishes for much happiness and good health in 2015!

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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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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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