Usually when I analyze sold data for the Berkeley, CA real estate market, it reinforces what I’ve experienced as a REALTOR® representing both buyers and sellers in this East Bay area. Not so with the first quarter results for 2010!
As our spring market evolved in 2009 we all were painfully aware of extremely low inventory. First quarter of 2009 saw a total of only 55 single family home sales. This year it feels as if we have a bit more inventory (a total of 72 sales), but we also have significantly more buyers. I would hope this would be true, since buyers have had a year to watch and hope for the market to tumble – only to see prices hold essentially constant. Interest rates continued to be at record-breaking low levels, inching up only recently. And buyers, especially first-time buyers, have had incentives in the form of tax credits (see my separate blog post about those). Buyers in the market for a home in the Berkeley, CA area should now be convinced that if this is where they want to live, this is as good a time to buy is there is going to be! A look back at median prices in Berkeley will also give buyers some solace in the knowledge that they are NOT buying at the peak now.
So when was the peak? That turns out to be a more difficult question to answer than one might think. As is the case with most things related to real estate, the answer is hyper-local.
In Berkeley, CA overall a look back over the past three years tells us that we hit the peak median price second quarter of 2007, at $922K. That also is the quarter with the highest sales activity in Berkeley, CA over the past three years. A year later Q2 of 2008 saw a median price of $785K, then Q2 2009 saw a further drop to $$632K. Having seen some increase in Q3 of 2009 to $667K, the next two quarters saw a drop first to $652K and now in the quarter just ended, to $625K.
However, if you look at North Berkeley (defined as Map area 1 by our local MLS) a different picture emerges. For this area, which represents on average one-third to one-quarter of total Berkeley sales, the peak was not in Q2 of 2007, but a full year later, in Q2 of 2008. While all Berkeley sales showed a median of $785K, North Berkeley hit a record high of $1,065M from 33 sales, and average number for that area.
Regardless of when we define the peak, we know that during 2009 and into this first quarter of 2010 we are well below the high points. For Berkeley as a whole, medians have been in the mid-$600K range. For North Berkeley, it’s been roughly $200K higher, in the mid-$800K range.