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 had two listings. I am delighted that they have both closed, with multiple offers and above list price! But those were tougher sales than expected, and the increased competition was a factor. As autumn leaves fell so did the number of available homes. Using Berkeley for a snapshot: in mid-October, we had 90+ listings and were experiencing a brief period of greater balance. That number has now been cut in half…and there are now more buyers pursuing those few properties. That picture is much the same in all of the cities I serve.
And it’s not likely that the real estate market will take a long winter’s nap, at least according to 1,300 respondents to a survey conducted by Realtor.com for its Winter Home Buyer Report.
Among the top reasons these prospective buyers are motivated is their belief that they will have one or more of these advantages: motivated sellers, better prices, and less competition from other buyers. But 24% admitted that they will be looking in the winter because they were unsuccessful in the previous two seasons.
These veteran buyers are not dazzled with visions of sugar plums. They know that they will face some of the same challenges that have frozen them out for over a year: in particular, a continued lack of inventory, either on the market or their price range. October housing data nationwide, as reported by Realtor.com, shows a strong market.
“Instead of the usual seasonal slowdown, October data show the 2013 fall market moving at a fast pace,” said Errol Samuelson, president of realtor.com. “Inventory has returned to last year’s levels, but prices continue to strengthen and homes are moving significantly faster compared to this time last year.”
Locally, demand is even stronger. That same article lists the ten metro areas with the shortest median days on the market. Bay area markets hold the top three positions nationwide, with #1 Oakland beating runner-up San Francisco by 18 days (30 vs 48).  The “Oakland MSA†should be read as East Bay, which includes all of Alameda and Contra Costa Counties. San Jose was 3rd, and one of California’s most depressed markets, Stockton-Lodi where I grew up, held the 5th position. Denver was the only area outside of California to make the top five. According to our MLS, during the past month the median days on the market in both Berkeley and Oakland was a mere 15.
Getting back to our off-season buyers, almost a third cited unpleasant winter weather as an obstacle, but keep in mind that this is a national survey. Although our days have grown short and many will be wet, we will not need a snow plow to get to a Sunday open house. We Realtors will have booties and towels ready for wet-footed buyers.
With our market still so strong “wait until spring†is not the only option for sellers who are ready to sell. The sounds you hear from above could be roof and chimney inspectors instead of a jolly fellow with a team of reindeer. Buyers will still be out there willing to deck your halls with green, especially the 19% of winter buyers ready to make an all cash purchase.
For buyers wintering over in the market, don’t expect a gift wrapped opportunity, but don’t give up either. Hang your stocking with care and a strong pre-approval letter. You might not be home for these coming holidays but, if you keep at it, St. Valentine’s Day could make a lovely start for you in your new home.
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