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.

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