The August 2013 East Bay Market update: a Mixed Picture

by arlene on August 10, 2013

This past month has been a very mixed picture: continued wild over-bidding alongside examples of good properties receiving no offers. A colleague had no offers on the scheduled date, and then received three the next week. The buzz this past week was a Claremont home with gorgeous views of the canyon: 15 offers, and the reported contract price was 30+% over list. It was priced low at $1.1M. How might it have behaved if priced closer to market?

My personal experience is a case in point of diverse behavior this summer:
My listing on Warring received multiple offers and closed more than 12% over list, a price that made my family of sellers very happy. And I was able to help three great sets of buyers acquire their new homes: on a single family home my clients were in tight competition and paid a very high price per sq. ft. (over $750!). One couple got a home right at list, and I was pleased to negotiate a condo sale below list for a buyer friend who was out of the country during the entire transaction!

After the initial shock of seeing interest rates rise sharply in May, more buyers have entered the market this month, and they seem to have accepted that rates are still lovely. While everyone loved interest rates in the 3’s, the high 4’s-low 5’s are still historically excellent. I’ve written about the 50-year history here.

The big picture continues to be what we’ve experienced all year: low inventory and high demand. As you can see below, inventory in all cities is down even from last year—and we thought it was very low then! Prices are well up from last year: in Berkeley by 22%, in Oakland by a whopping 70%. We know that rate of increase can’t continue.

We’re entering into what is traditionally a slow month in real estate. Quite a few colleagues are off on enviable holidays. But others of us have been working hard to bring on new listings before the end of the month. I’m looking forward to welcoming visitors to the debut this Sunday of what I’m calling a Sylvan Retreat in the Berkeley Hills, 70SunsetLane.com  It’s a modern brown-shingle with dramatic central beams, a bright solarium and spacious decks.  I’ll be there from 2-4:30 both Sunday the 11th and 18th of August. Come up the hill to the far side of Grizzly Peak on the way to Tilden Park. The views make you feel like you’ve gone to the mountains and yet you’re just a few minutes to Solano Avenue or Gourmet Ghetto.

Comparing July 2013 to last year, sales were down in every city by a total of 19%. Prices, however, continued to grow, increasing 35%. And properties continued to sell further over asking at 8.7% above original list price.

Now that we have reached the summer months, the fog is rolling in and more people are taking vacation. But we witnessed a flood of new listings in July, so sales may remain strong through August. Expect another burst of listings — and high levels of competition — after Labor Day.

Hope you’re staying warm this cool summer!

~Arlene

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