The Berkeley Area is one of the most stable markets in California.
--Leslie Appleton-Young, Chief Economist, California Association of Realtors 10/31/07
As is true for the national real estate market, many areas in California have experienced great problems from the sub prime loan crisis. Berkeley, however, has one of the best and most stable real estate markets in the state. Although our sale's volume is down, median home prices are up.
"(The East Bay) median price climbed almost 9 percent from a year ago, to $810,490. The median home price gained 3.3 percent in October over September's." --Mark Calvey, San Francisco Business Times.We are predicting a continuation of this trend and modest gains for our stable neighborhoods in 2008. Our confidence for the New Year comes from embracing the three "L"s of real estate, (and we don't mean location, location, location.) Our revised list includes; Local expertise, Leveling of the playing field, and Lifestyle choices.
1.) We believe local expertise is mandatory in navigating the emerging marketplace. In this case, we mean local to the nth degree. Even in the East Bay, neighborhoods within an individual city can perform differently. Homes in the flats of Oakland are performing much differently than in the Hills. North Berkeley responds differently than West Berkeley.
In addition to physical location, the health of our local economies will influence the real estate market. California's unemployment rate continues to be lower than the national average and our diverse businesses and industries add further stability to our marketplace.
Local expertise is crucial. The current loan climate is unprecedented and has rendered some national economists mute on future predictions. In reference to the down market experienced in much of the state, Leslie Appleton-Young cautioned that it was tough to predict how long the current decline would continue because it differed from previous real estate downturns. The 1990s slump, she said, was exacerbated by the national economic downturn. "In the past, the market dipped because of a recession," she said. "Now we're independent of a recession, there's still moderate growth." Absent an historical model, she declined to predict an outcome. History can't tell us what to expect in the New Year. We believe that the best information will come instead from the real estate professionals who are present to monitor the events as they unfold, and astute enough to perceive emerging patterns.
3.) Finally, we see individual Lifestyle choices as playing a big role in the New Year. 2007 was the year for sitting on the fence as reflected in the reduction in the volume of sales. We believe more sellers and buyers will see 2008 as the year to move on with their lives. Area sellers may have to get more realistic about how long it may take to sell their home. Prices are not plummeting, but time on the market has increased. Hoping and waiting for the return of the frenzy circa 2003 will just add more days to your time line. Life involves change and if those changes include the sale of your home, we are here to tell you that sales are still strong in much of Berkeley, Oakland, Albany, Kensington and El Cerrito.
"If you've owned a house for a while, you don't have to worry. The gains you've enjoyed in recent years are huge compared with recent price downturns." --Joe Light, Money Magazine.As for Bay Area buyers: Our area continues to be a desirable landing spot. We predict that buyers in 2008 will be interested in putting down roots in their new personal residence. 2008 buyers will value all of the wonderful intangibles that come with the bundle of rights associated with home ownership. For those buyers the market is ripe. View our post titled, It's a Great Time to Buy Your Dream House.