Tuesday, October 27, 2009

Breaking Down Berkeley's Median Home Price Statistics.

In our last post we provided the Median Home Prices for Alameda and Contra Costa Counties. We also stated that:
This is not an automatic indication of the depreciation of your individual home. Our area contains many unique geographic pockets and real estate is still acting in a hyper-local manner.
This statement is more profound and dramatic than our previous post illustrates. In this post we have taken two Berkeley zip codes, 94702 and 94708, and charted a graph for each zip code's year performance.

(Click on the graphs for a larger view)

These two zip codes alone represent a 64 point statistical spread. The graphs stress that this area does not lend itself to blanket statements about "the current market." The city statistics can not accurately depict values for individual neighborhoods. National statistics and trends are even less telling. Talk to your Realtor (or one of Berkeley Hills Realty's qualified agents) to get a better understanding of this hyper-local phenomenon.

Monday, October 26, 2009

Sep 2009 Median Prices for Alameda and Contra Costa Counties

This chart depicts statistics for median home prices in Alameda and Contra Costa counties. Median home prices for additional California counties can also be found on the CAR website. This data is a reflection of a general year-to-year trend based on an analysis of limited inventory. This is not an automatic indication of the depreciation of your individual home. Our area contains many unique geographic pockets and real estate is still acting in a hyper local manner. To get a comparative market analysis that reflects the true value of your Berkeley, Albany, Kensington, El Cerrito, Richmond, Oakland, Piedmont, Emeryville, Lamorinda or Alameda home contact one of Berkeley Hills Realty's experienced agents.


Sept 2009

Sept 2008

% Change

Alameda County
















Castro Valley




































San Leandro




San Lorenzo




Union City




Contra Costa County




















Discovery Bay




























Pleasant Hill








San Pablo




San Ramon




Walnut Creek




Median home prices contained in this chart were generated from DataQuick Information Systems.The price statistics are derived from all types of home sales -- new and existing, condos and single-family. Movements in sales prices should not be interpreted as changes in the cost of a standard home. Median prices can be influenced by changes in cost, as well as changes in the characteristics and size of homes sold. Due to the low sales volume in some cities or areas, median price changes may exhibit unusual fluctuation.

Friday, October 23, 2009

Preparing an Estate Home for Sale

Today, in preparing a Kensington home for the market, we sent the following list of recommendations to the heirs. We thought all would-be sellers might find it useful:
  1. Landscaping: We observed the home to have well-manicured, mature landscaping. In our opinion, this existing structure would benefit by the addition of some economical, fresh, new plantings to fill in some empty spots and marry the mature plantings with a bit of updating. Now that rains have started in our area, we believe the lawn could be greatly improved by a sprinkling of grass seeds. We can get a landscaper to work within a budget here.
  2. Interior painting: In our estimation, there is no better return on investment than a coat of fresh paint. We can choose a color pallet that allows the paint to not only clean and brighten, but also instantly update the home’s interior. We believe the home is in need of complete interior painting all the way through the closets and down into the laundry/furnace room. As part of our service, painting quotes can be obtained.
  3. Floors: The home is believed to have serviceable hardwood floors beneath the carpeting. We believe the carpet should be removed and the floors cleaned and polished (not refinished.) We have a floor man that can restore the floors to a very good look at a fraction of the cost of refinishing. This assessment is based on a look at exposed wood floors and the condition of the older carpet. We do believe there is a good chance they will only need a thorough cleaning. If the carpet is removed and we discover a surprising amount of hidden damage, we may have to reassess. This is not our expectation.
  4. Repairs: There is a broken window pane in the kitchen that should be repaired. There is also an area of peeling paint on house and large cracks along the back. The repair and paint matching of these exterior sections should be bid out before determining if they make sense to the market prep budget.
  5. Cleaning: After floors and painting, the home would benefit from thorough cleaning and window washing.
  6. Clearing: The home needs to be cleared of current contents. If you need help with this we can offer names of estate sale organizers and haulers.
  7. Staging: Staging is very important. We often tell sellers that staging is like buying a shiny stainless steel appliance, but sprinkling that high-end appeal all over the house. In addition, 85% of buyers are now using the web in there home search. Empty rooms lose visual square footage and buyers do not stay on a site with less than stellar photos. To have good photos, there must be something in the rooms on which to focus.
  8. Reports: There are some reports that buyers expect to see as part of the sale preparations. These include; zone disclosure report ($123.95), Termite report ($250), sewer lateral compliance (the bid is free, but likely to reflect needed repairs). There is also an ordinance in Kensington requiring an automatic gas shut off value before the sale. This device costs approximately $500. Some additional reports are optional, but may have value in this case. These include general home inspection and structural engineers report. We should meet in person to discuss your options and the pros/cons of supplying additional reports.
We believe that these improvements will not only maximize the home’s potential value on the open market, but also that these improvements optimize the dollar for dollar value of the costs associated with the market preparations. We understand that market preparations are costly, but our experience is that these are the items that draw buyers to the property and keep them interested. Never-the-less, this list represents our advice only. You are the decision makers. Please don’t hesitate to call your agent to discuss your concerns and share your thoughts on marketing the home. As part of our service, written bids will be delivered to you and approved before any work is ordered.

Related Post:
Preparing Your East Bay Home For Sale - Top Ten Value Added Improvements

Thursday, October 22, 2009

The Simplified Explanation of Closing Costs

The home buying process is fraught with a flurry of paperwork associated with the property and the process. By the time closing costs are delivered in writing, "disclosure fatigue" has set in and the mysterious numbers are floating like stars around a cartoon head injury. This informative three minute video lets the cartoon characters deliver the breakdown:

Tip for Home Buyers: Have your real estate agent provide you with an Estimated Closing Costs Statement early in the process. Then you will have time to talk over the individual charges and understand their merit. If you know the basic charges in advance, you may discover a few that are negotiable in your contract with the seller. As a very rough estimate, we tell home buyers to budget aproximately 3% of the sales price for the purpose of costs associated with the transaction (AKA closing costs).

Wednesday, October 21, 2009

C.A.R. releases California Housing Market Forecast for 2010

“What is happening to the real estate market?” This is the burning question on every homeowner or would-be-homeowner's mind. California just got an answer. The California Association of Realtor's just released its 2010 California Housing Market Forecast. The new report sounds cautiously optimistic:
“After experiencing its sharpest decline in history, we expect the median price to rise modestly next year,” said C.A.R. president James Liptak. “2010 will mark the beginning of the ‘new normal’ for California’s housing market. This ‘new normal’ likely will feature a steady stream of sales driven by distressed properties in the low end of the market, coupled with moderate home-price appreciation."
Consistent with our last Market Update for East Bay Real Estate, Liptak adds that our California housing market continues to be "a tale of two markets."
“The low end continues to attract first-time buyers and investors, with a resulting shortage in the number of homes for sale. Sellers at the high end, however, continue to be challenged by the ability of home buyers to secure financing as well as their concerns about where prices are headed.
Leslie Appleton-Young, C.A.R. Vice President and Chief Economist, also shares her Market Forecast power point presentation developed for the California Realtor Expo.
“The wild cards for 2010 include foreclosures, loan resets, the labor market, and the California budget crisis, as well as the actions of the federal government,” Appleton-Young said.

Monday, October 19, 2009

Market Update for East Bay Real Estate

by Tracy Sichterman

One of the parents at my daughter's school just asked me; "Are houses selling better this year?"

For most, the answer is yes. Houses that are priced well are selling quickly. Some with multiple offers. One house in Albany, at 1700 Sonoma, just closed for 124% of its asking price. It was listed for $625,000 and just closed for $777,000. This scenario is the result of optimistic buyers entering our Bay Area market-- which doesn't have enough inventory to meet the demand. As reported by our agents, activity at the open houses is also up significantly.

That said, there is a bit of a glitch in the high end market. As blogged about on Homegirl, by Tracey Taylor, a home in the Claremont district of Berkeley, at 2970 Avalon Avenue, just sold for 29% less than the original asking price. Truthfully, the original asking price of $2,950,000 may have been ambitious. The home closed last month for $2,100,000.

There are good reasons for the hurdles in the high end market. Jumbo lending is challenging-- post mortgage meltdown. In addition, many who would have chosen to "move-up' are finding that transition more difficult. In the past, bridge loans would have helped them access to their current home's equity. Now, homeowners are looking at the prospect of selling first to get the "cash in hand." Unfortunatly, this option forces them back into the rental market while they look to buy the new home. Many can not manage the extra move plus additional hassles this would require. This may be one reason our inventory is so low.

All told, buyers are still looking for a bargain. We have experienced several multiple offer situations where the seller did not get their full asking price. In the past competition from multiple offers would almost automatically ensure a sales price higher than the current list price. This is not always true today. There does seem to be a trend for these concervative buyers. The homes with low offers tend to have been on the market for longer than the traditionally short listing period. Price reductions may have brought houses within reach of the right buyers, but then the days on the market have kept those buyers acting cautiously. We also see many good homes that seem to miss the radar of initial competition. Deals are spotty with more competition in the market place... but the deals are still out there.

Thursday, October 15, 2009

Wishing the Zestimate for Your East Bay Home was Higher?

an opinion by Tracy Sichterman

All homeowners wish the automated valuations on sites such as Trulia and Zillow would be a bit more optimistic. However, a recent Seattlepi.com post titled, Home sellers wary of new MLS rules, warns of a new Northwest MLS rule attempting to screen these valuations. Staff writer Gerry Spratt writes:
The Northwest Multiple Listing Service has instituted new rules about blogging and automated estimates of property values, but some industry insiders say the changes could end up hurting the people they are meant to protect -- sellers.

The new rules allow sellers to block automated valuation models (AVMs) from appearing next to their listings and prevent agents from blogging about their properties. AVMs are intended to reflect the market value of a property, but can often vary wildly from listed prices.
Despite wild variations and negative valuations, I am against such rules that would block blogging and AVMs. In my broad opinion, if you try to regulate the internet, you only end up screening out the “real voices.” Those who want to manipulate the data always seem to find work-arounds to the barriers. Conversely, those with a legitimate perspective often only participate if they feel invited. Blocking AVMs and blogging may effectively uninvited many voices.

Blocking contrary opinions on the web also feels a bit deceitful to me. Throughout the sale, ethical Realtors encourage sellers to “disclose, disclose, disclose.” How do such agents go from that stance to a sidebar statement of, “let’s opt to screen out any potentially negative information that your future buyer might find on the web.” Instead a smart real estate agent should employ tools like Google Alerts to keep up and participate in the active dialogue about their listing.

We need to embrace transparency throughout the real estate industry. In the aftermath of the sub-prime crisis, consumers cried out for more transparency. Screening out negative comments or valuations on the homes that we sell flies in the face of that goal. It is like saying, “we want our banks to be subject to scrutiny but don’t look too closely at the property itself.” If a public AVM comes in with a low price, it is up to the seller and agent to effectively dispute that data. Convince the buyers otherwise. And, by the way, he/she is a 2009 consumer and you are going to need some facts to back up your argument.

Prove why you think your Zestimate is wrong, but don’t pretend the information isn’t out there. This statement is coming from a Berkeley agent who works in an area sprinkled with “older homes” and “famous architects”; two complex issues for computer generated valuations which often create wild discrepancies in AVMs. The real estate industry needs to stop working so hard at protecting and sequestering information and stand up instead for the competent professionals who are willing to participate in active, informed dialogue with consumers.

Speaking of information being “out there”, how do they intend to regulate such a rule? Take the following scenario: Let’s say an agent blogged about a particular listing last year, but it did not sell. This year, the homeowner puts the home back on the market to once again test the waters. The seller now opts to restrict agent blogging. A search under the property address may bring up a reference to last year's blog. If that blog doesn’t have a date stamp, is the agent in violation of the current restriction? Web 101 students know that you can’t really take anything back. Once it is out there, it’s out there. Regulation, in my opinion is not only deceptive, but pointless.

Tip for Buyers and Sellers: This post references publicly listed AVMS. Currently, lender generated AVMS (ordered as part of the loan underwriting process) do occasionally interfere with the transaction. In some instances, Bay Area buyers have offered to purchase the property for substantially more than the AVM price would reflect. The difficulty often comes when the buyer pursues a loan to complete the purchase. The lender employs an AVM that doesn't take into account important specifics about the property (such as the LEED certification or the famous architect.) We have seen loans get turned down based on a banks faulty AVM or a narrowly restricted appraisal despite the willingness of buyers. So far, the answer has been to 1. try to dispute the resulting appraised value or insist on a new appraisal, 2. resubmit the application to a new lender, or 3. in the worst case scenario, put the house back on the market to look for a new buyer. We have discovered that open dialogue only works when all parties are reasonable. Given the pendulum effect of the mortgage crisis, not all banks are ready to be reasonable.

As for the public sites, a homeowner can correct inaccurate data that may have gone into the algorithm. (My own home was listed on Zillow minus 1,000 square feet of legal living space-- until I corrected it.)