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Archive for the ‘East Bay’ Category

How high is enough?

Like it or not being successful in many things requires playing by the rules. Knowing the current lines in the sand is helpful when navigating the dynamic real estate playing field!

Buyers (and agents) groan about the current Oakland/Berkeley/Piedmont real estate market norm driving the “list low” phenomenon. The “worst offender” agents take flak but it’s “Catch 22” if sellers list closer to market value and nobody writes an offer thinking the expectations are 20% higher!

As you wrap your mind around the current real estate math, it can help temper your emotional response ( why don’t they list at what they want??!! I have to offer how much over asking??!!!) to know that the seller listed under market value and you are not necessarily overpaying when you add another $200K+ onto the list price for your offer!

The listing agents job is to get the seller the best terms and price, not to keep the buyer happy!                           

How can I make sure I don’t overpay?

The simplest answer is to see enough homes you know why you are offering what you are, and buy enough house that you can stay there for at least the next 10 years enjoying the benefits of a historically low mortgage rate and most likely riding out any market fluctuations.

Offers on a $1M home can frequently come in with a LARGE spread between them. A $500K spread between offers with the top 3 stepping up in $100K increments is not uncommon.
It’s true there are buyers who “just want to be done” and out of area agents who use questionable comps or don’t know the local dynamics but that is still your competition.

The only way you are going to be moving in to that house is by either paying more than anyone else, or making an offer with such superior terms the seller is willing to leave some money on the table from a higher but less compelling offer.

What about contingencies?

Most agents and their clients will be more comfortable when the market shifts and buyers can again compete with their contingencies in place.
Can you get into contract with contingencies?  “It depends” The trade off for contingencies is that something else about the offer needs to make it more attractive than non-contingent offers.

If the house is overpriced and sitting, or the seller provides no upfront information or there is something questionable about the property or your financing you most likely will not give up your contingencies.

However, most of the offers we currently see in competitive situations are non-contingent with perhaps 20% having 1 contingency.

Successful buyers in this market know the rules and have chosen to play by them, ultimately it’s your money and you decide what a property is worth to you!

Good agents are able to help advise on strategy, realistic parameters and when you might be able to bend the rules!

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Many of us who have lived in Oakland for a long time continue to be amazed at this special place on earth!

If you’re seeking a unique spot in a spectacular setting , my new listing is a  magical 3+bed /2 bath home is situated on over half an acre of terraced gardens, and includes an exceptional detached artist studio with half bath above a 2 car garage.

There was no way we were going to neutralize this home into a sea of grey for sale!
Instead the owner and stager “curated” the  wonderful selection of tasteful and artistic treasures to showcase the home and possibilities for the detached studio!

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Both the indoor and outdoor spaces have been lovingly and meticulously updated and maintained.  A perfect spot for the creative and contemplative soul, this true gardener’s and artists delight has planted terraces , hidden patios and a slice of the golden hills.

Video image 3

Come  enjoy a few minutes of contemplation, the scrunch of car wheels on a gravel driveway , birdsong and wind in the trees!

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I’ve listed several properties in the Oakland Temescal neighborhood over the last couple of years and delightful as they have all been this one is the grand dame!

The house feels more like a Rockridge or Elmwood home with it’s gracious entryway and large front porch, and my sellers believe it is older than the county records indicate and was likely built prior to 1910.

Painted and staged, a few light fixtures replaced, old window sash cords replaced, charity donations and  dump runs completed,toxic waste removed and we are ready to roll!

Visit : www.4415webster.com

Take a walk through with my fabulous  3D virtual tour !

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Thank you to my clients who sent pictures of the Amaryllis I gave to many on my holiday visits! It is SO nice to see clients old and new during the holidays and SO amazing and inspiring to see those beautiful blooms emerging in the Spring!

And now the Amaryllis are fading and inventory is picking up and it’s time to buy a house!

Amaryllis2

Step 1. Consider how long you plan on staying?

In this type of market try to buy enough house that you don’t have to move for a while.
Historically we are in 8-10yr cycles between low and high points.
Every time you sell it costs you 8-10% of the sale price. Transfer taxes, broker fees, house prep.

Amaryllis

Step 2.  Find a good local real estate agent and choose a local lender.

I know…. many buyers out there wonder what agents do since there is so much information on line???!..…..it’s a bit like finding a lump and going to the doctor….…You go for their expertise and advice based on knowledge gained from the gazillion hours they spent training and years of experience in the field doing the same thing many many times and learning from each one. 

Amaryllis3

Step 3. Narrow down neighborhoods.

In this fast moving market you want to be absolutely committed and very focused when you are ready to write offers. Don’t just fall for the house!

Do research communities, crime, transport and imagine your lifestyle in different types of locations. Visit neighborhoods at night and weekends, talk to neighbors.

Are you so averse to driving you are willing to pay a lot of money to live in a shoe box near BART? Do you want some tranquility which comes with access to Park lands and an extra room for visitors to come and stay? How about schools?

Amaryllis4

Step 4. See as many homes as possible in your price range. ( currently most sell over list price!)

You want to know how many homes out there don’t work for you…….so you know why you pay to get what you want! Do weekend open homes if possible, see the “NOs” then. Visit the more likely candidates with your agent.

Step 5. Steel yourself for competition and market conditions!!

Try to ignore list prices and not be upset thinking “Oh my god ….I have to bid $100K over to even stand a chance??!” Check SOLD data with your agent.

DO NOT BE FOOLED BY ONLINE REAL ESTATE VALUATIONS !!!!!!!!!!

Of the two dozen plus listings we recently analyzed less than a handful performed as indicated by the online real estate site. Many sold for way more money, some sold for way less money.

 

Hang in there!!  Inventory is picking up and there is a house for every realistic prepared and committed buyer!

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The fourth quarter in Oakland and Berkeley and neighboring cities continued with a serious shortage of inventory.

There was a slight increase in listings after labor day, and a momentary slow down. In part attributed to the sheer exhaustion of the buyers (and their agents)! How many way over asking clean and often contingency free offers can you write and still not get the house??!

Of note in the 4th quarter, the Oakland neighborhoods of Redwood Heights and Lincoln Heights saw a big jump in average sale price.
For some time they have been significantly below the Glenview prices and the difference is now closer to a recent historical norm.

For perspective on inventory in the Berkeley/Oakland areas we cover ……

On 12/31/2013 there were 222 active listings
On 12/31/2014 there were 131 active listings
On 12/31/2015 there were 64 active listings

Sellers… if you are ready… do not wait! This is our Spring market and the last Jan-Feb sellers have done very well.

In March and April you will have competition!!!

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For some uncanny reason the last 2 Oakland homes I lived in are on the market at the same time!

When we sold our home in 2006 we caught the market as it was starting to drop, not catching the highest price but happy we timed it when we did.

Below are charts showing the rise and fall of several east bay neighborhoods from 2005-2015!

If you’ve been waiting to sell the sellers market does not usually last for a very extended period of time!

 

Berkeley home prices have soared to new heights in the last couple of years. Always tight on inventory, prices never dropped as significantly as in some areas.

berkeley historic sales

 

Piedmont prices have risen astronomically, with quality homes, easy commutes and schools ranked top 10 in the nation.

Piedmont historic sales

 

Rockridge homes have increased significantly in value due to proximity to urban amenities and the desire for convenience.  Their fall was less precipitous than in many areas.
Rockrdige historic sales

 

Glenview homes are being sought by buyers priced out of Crocker Highlands.
glenview historic sales

 

Montclair homes rose a little more slowly with many buyers liking the good schools but preferring walkable locations with a more urban vibe.
Montclair historical prices

 

94602 includes The Oakmore, The Laurel and Dimond areas. Many of these homes are selling at record highs with the less pricey areas within 94602 still moving up in value.
Areas below MacArthur took a big hit when prices fell and had more ground to recover.

94602 historic prices

Redwood Heights has been slower to rise in value, despite the well regarded elementary school there is no central destination which drives other neighborhood prices.
redwood heights historic prices

 

Many homes in the 94605 zip code have not overtaken the height of the market but many have fully recovered values.
94605 historic sales

Expect to see the lower end of the market and condos continue to climb in 2015 as buyers are priced out of neighborhoods and compete for the more moderate end of the market.

 

 

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Once upon a time you paid more money to live in the Oakland Hills than in most parts of the flatlands. Schools had the better reputation, you were away from the urban bustle and grittier parts of city living and maybe you even got a lovely view of the Bay!

OK, so Rockridge hasn’t been cheap for a long time, but the boundary lines between which areas sell for more and which sell for less are shifting.
The bike riding 20 something and the down sizing 60 something continue to gravitate to the urban hub.

A few clips from recent sales showing the list price above and sale price….SP is the sale price. Multiple offers and strong competition for these  homes in hot Oakland neighborhoods!

 

Rose Garden

Rose Garden

The Rose garden near Grand Ave and Lakeshore

Lakeshore

Lakeshore

Lakeshore  near Grand Ave and Lake Merritt

Bushrod

Bushrod

North Oakland not far from Ashby and MacArthur BART

Piedmont Ave

Piedmont Ave near shopping district and restaurants

 

 

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