Last year, real estate prices in most Berkeley/Oakland neighborhoods dipped again by about 5%. This is very likely the result of continued high unemployment in the East Bay, an increasing number of short sales and overall cautiousness on the part of Buyers. This year, however, there are signs of an Early Spring in real estate in the East Bay (as in better times ahead.)
More Buyers seem to be coming out of hibernation – perhaps with the fear that the deflated prices won’t last forever and extra low interest rates are now hovering around 4%. Stagers, painters and inspectors are getting booked weeks in advance – a sign more people are buying and getting ready to list.
According to a recent article in the SF Chronicle, this is backed up by economists of Bay Area California who expect “moderate growth” in the local economy. Not that we’re going to come roaring back – except in high tech – which is booming. Many expect the technology boom to spread to other areas of the economy. And, in fact, UCLA Anderson forecasts call for East Bay job growth of 2.2% this year (even higher than San Francisco’s 1.4%).
As for real estate prices, experts expect them to remain relatively flat – not down – as foreclosures and short sales decrease. My own view is that real estate prices in the East Bay will start to increase since all economic signs are pointing to increased demand. Not that things will all of a sudden boom, but that we will witness a gradual and early opening of “spring growth.”
If you’d like to take advantage of the early spring in East Bay real estate, just give me a call on my cell phone: 510-847-2409.
Financial guru Peter Lynch of Fidelity Magellan fame used to say that the way to pick a winning stock was to walk around your neighborhood stores and see what was selling. The same could be said for Berkeley/Oakland real estate. Amid the gloom of hard times and increasing foreclosures, there are some bright spots on the East Bay real estate horizon...signs of optimism among the “folks.”
There’s a certain energy on College Avenue outside my office that wasn’t there last year. Home buyers seem more ready to “buy” than to just get a “deal.” More houses in our area are getting multiple offers.
And lo and behold, recent stats are starting to signal a turn themselves. As Jim Cramer of “Mad Money” fame pointed out the other day on the Today Show, auto sales are up. The stock market is up. And just recently, starts of apartment complex building were up. Even the number of homes selling was up 4% over last year.
The best news is... housing puts people back to work. And that should be enough to bring some light in all our lives.
Happy Holidays. Happy New Year, one and all.
"The real estate market will improve in 2012...gradually." So says Lawrence Yun, Chief Economist of the National Association of REALTORS®, at a recent conference.
According to Yun, tight mortgage credit conditions and consumer confidence have been holding us back. Nevertheless, he said, there is a pent-up demand for housing that can’t go unsatisfied forever. The gradual increase in real estate sales will track the gradual increase in GDP (Gross Domestic Product), which is expected to come in at 1.8% this year and grow to 2.2% next year.
Interest rates are expected to rise slightly, according to Yun. From their present all time lows of 4%, they will likely reach 4.5% by mid-2012.
Ok, real estate is slowly starting to turn the corner. We won’t be having a blow out party, but we’re making the turn. We see stabilizing evidence in the Berkeley/Oakland market, which is indicative of a market bottom. For instance, since June of this year, the average sold price in Berkeley was $680,853 (or $407 per square foot). That compares to last year’s $679,531 (or $430 per square foot). The difference in price per square foot is more likely a difference in size of houses being sold. In Oakland, the average price since June of this year was $343,606, with a 28% increase in number of sales. The average price per square foot was $212. That’s higher than last year’s $363,054 average price and $196 per square foot.
The moral of the story given is that house prices likely won’t be declining, but interest rates...and the cost of buying a house...will be going up. If you are thinking about buying a home or trading up and you can get a mortgage – this is the closest thing you’ll get to a “buy” signal.
If you’d like to explore your possibilities for buying a home in Berkeley/Oakland, just call me on my cell phone: 510-847-2409.
The recent news from the National Association of REALTORS® sounded a pessimistic note amid our struggling real estate recovery. Pending home sales in the U.S. fell 4.6% last month from August levels. Of course, Berkeley being Berkeley, we are not following national traditions – even in real estate. In fact, in the last quarter (ended September 30), half of all sales in Berkeley had multiple offers and sold over asking!
Secondly, in representing a Buyer recently who was trying to buy a house in Elmwood/Claremont, I was in a bidding war with eight others. The house ultimately sold $150,000 above asking. While prices are not back to the high times of 2007, it does portend increasing sale prices in the Elmwood/Claremont neighborhood of Berkeley. In fact, upon further examination, price per square foot in the Elmwood/Claremont neighborhood is up over 7% from last year.
This is one of the first strong healthy signs I’ve seen in the last four years in these parts. You might consider this a “leading indicator” of sorts for Berkeley ... and the East Bay real estate in general. For, while the rest of the country still seems to be stuck in the doldrums, Berkeley seems to be marching to its own drum ... and a decidedly different beat.
If you have any questions on Elmwood/Claremont or Berkeley/Oakland real estate, just call me on my cell phone: 510-847-2409.
Time was when a prestige neighborhood in the Berkeley or Oakland hills was the destination of choice for people looking for a house. Well, get out of your car and put on your walking shoes, because now the determining factor is becoming how “close to coffee” you are. Or to put it another way, what’s your “Walk Score"?
I was working with a young couple determined to buy their first house in Berkeley. They have unilaterally eschewed the “Hills” as being too far away from everything. And we are focused on homes within 10 blocks of coffee. That would be the “flats” or bungalow neighborhoods of Berkeley, where houses and lots are smaller, neighbors ... and coffee are closer. (That translates into Walk Scores of 80’s and 90’s versus 40’s for the Berkeley Hills.) I’ll bet Alfred Peet never knew he was starting a real estate revolution when he started the coffee revolution.
Actually, my clients are not alone. In fact, we bid on a house in the Elmwood area, close to coffee, shops and restaurants ... and so did six others. The home went about $150,000 over asking while similar sized houses in the Berkeley Hills, priced $300,000 less, are languishing.
It turns out being connected -- not just electronically, but physically -- is all important to this generation of Buyers – the Millenial’s and GEN X’s in their 20’s and 30’s. They would rather have a more modest bungalow than an expansive home with a view ... as long as they are close to coffee. In this day and age, coffee ... not the street you live on... determines how well connected you are. And what price your house will sell for.
If you’d like to see what houses are for sale in the neighborhoods of Berkeley and Oakland, just give me a call: 510-847-2409.
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A top producing agent with McGuire Real Estate in Berkeley,Oakland,Alameda. Has helped over 300 buyers and sellers sell and purchase homes. Number 1 producer in her office for over 10 years.
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