The Best Bay Area City You Never Heard Of

We are fortunate to live in a geographical area with lots of interest and equal hype.  Oakland has been touted as the “New Brooklyn”. Piedmont was recently voted one of the best suburbs for raising a family.  And Berkeley also has its own throngs of admirers. 

We live here and tend to agree.  We live here, so we also tend to notice what is missing from the national press.  We think the best bay area city that you never heard of is Albany, California.  With a population around 19,000 occupying 5.5 square miles, Albany is a friendly place to live for all ages.  Albany has great public schools; averaging a score of 9. It has low crime and great walkability.  There are great parks (Memorial Park and Terrace Point) and green spaces (Albany Hill and The Albany Bulb).  The main shopping strip along Solano Avenue extends without interruption into Berkeley and offers fantastic restaurants and many boutiques.  It also offers unusual curiosities such as the Bone Room (displaying real bones of all types) and Casa Oaxaca (crafts from Mexico).

On the northern border of Berkeley, Albany offers proximity and many of the joys associated with Berkeley-- with a more affordable price tag.  The median price for a home in Albany according to Zillow is $822,100 versus Berkeley’s median of $971,100.  Krista Miller and Rosie Papazian of Berkeley Hills Realty currently have a three-bedroom home in Albany offered at $779,000.  It is well-located 730 Stannage Avenue, and open this Sunday, November 22 from 2-4. Open house canceled - Seller accepted an offer.

Three Tips for Finding Unicorns in the Berkeley Residential Real Estate Market.

174 homes have sold in all of Berkeley since the beginning of 2015. In the year's first four-and-a-half months we have seen some intense competition in our housing market. One house on Cherry Street listed for $970,000 closed escrow at $1,600,000-- a whopping 167% of its asking price. Fifty of the properties sold at least 25% over their original price. Finding your way out of the intense competition can seem like searching for unicorns.

It is an undeniably competitive market, but not every house sells substantially over its asking. The average sold over asking price for all 174 sold properties is 115%. April saw a 34% increase in new inventory over January’s dismal offerings. An upswing in inventory has piqued our optimism. We are hopeful that our clients will find new opportunities in the summer market.

Still we are realistic.  Many buyers will brave the stampedes and continue to bid aggressively. If you are looking for the picture perfect bungalow within steps of Peet’s Coffee and the Cheese Board, it is likely you will still be cliff diving into the most competitive waters. For the more conservative buyer, here are our secrets to finding the unicorns:

1. Explore New Territory: Unicorns don't travel "tree-lined streets" in "coveted neighborhoods." A home on Grant quoted as “prime location” achieved 155% of its asking price, while another on Acton advertised as “fantastic location” got 150% of its original price. Although it’s hard not to covet Berkeley's most popular zip codes, consider up-and-coming neighborhoods as an alternative. Look for neighborhoods with strong commercial anchors like the developing Gilman District. In addition there are opportunities just north of Berkeley's borders in towns such as Kensington.
2. Embrace the Akward! Unicorns have horns. Hornless homes in great shape command premiums. A home in the Berkeley Hills on Alamo referred to as “pristine” sold for 60% over, and $450,000 over the listed price. Another “beautifully updated” home on Shattuck sold for 46% over. Conversely, a home on Dwight with “potential” sold at 90% of its asking, and one on Spaulding needing TLC sold at only 92% of its asking price. However, don’t assume you’ve lassoed your fantasy creature just because you’ve found an easy fixer. On Spruce Street, one “contractor’s special” in really poor shape listed for $599,000 and cleared $850,000. If it’s got that great zip code (see #1 above) or fabulous architecture, you might not be in unicorn habitat. In fact, pristine is uncommon. Most of our housing stock was built prior to WWII, so it is safe to assume most homes need some TLC. Even the houses with the new paint and cute staging can have skeletons in their closets. Yet, the paint and staging is often enough to draw competitive offers. True unicorn seekers should instead get excited about unusual layouts. Awkward floor plans can confuse the competition. Also remodels done in poor taste might be hidden opportunities. Sellers tend to price these on the high side, because they value their own improvements. Then, the unappealing design fails to entice area buyers. If your choice is either to pick the cute popular home (that includes reports which you will be expected to accept in “as is” condition), or head over to the house with the lousy floor plan or home depot upgrades, keep your eye on the latter. Chances are, what you save in competition may pay for a designer or architect’s time to help you reimagine the aesthetic.
3. Look for the Overpriced and Overlooked: Look for the unicorns that haven’t been snapped up by week two. Focus on properties that have been on the market for longer than thirty days. They do exist! Of the 174 properties that have closed so far this year, 30 were on the market for longer than 30 days. Not all were overpriced. Four properties actually raised their price as a strategy and closed escrow at an average 110% of their original asking. 13 of the 30 did take a price reduction, but even so the reductions were slight averaging 7%.

Happy hunting.  Regardless of where you invest, a Berkeley Hills Agent can help you find what your seeking and help you succeed at your goals.

How To Thrive When Your Bay Area Home Sells Out From Under You

Where do you go if you sell? Even though Sellers have regained positive equity in their homes and repaired past credit woes, it is still hard to sell when you don't know where you’ll land. Entering the competitive market as a buyer after you sell your departing residence is daunting. With a market moving this quickly, Sellers can risk losing their real estate foothold. Here are five strategies to help you thrive as you make your move:

1. Climb the real estate ladder. Buying up increases your chances for success as you bracket away from your competition. Typically, starter homes are the most competitive as they represent the first tier of affordability. Selling a starter home may bring two advantages. First, as you move up in price range, you leave behind some of the competition who can't afford to advance with you. Second, you may benefit from a large down-payment from liquidating your equity. (This is also true for those downsizing.) Your agent may be able to give you insight into how much equity your current home holds, how many offers are typical in each price range, and the relative heft of the over-bids.

2. Write your own ticket. Who invented the idea that you have to sell before you can buy your next home? Test the waters with creative contingencies. If you are afraid you will end up without a replacement home, make the sale of your current home contingent on identifying a replacement property. This is tricky and buyers will need some reassurance in the form of time frames. Ask your agent to talk it through with you.

3. Move to your dream location. If your dream is outside of the bay area, chances are you will be able to bring along a good financial cushion. We hate to lose our long-time locals, yet for some sellers, an out-of-area move may present a viable option. Your Berkeley Hills Realty agent can help refer you to a reputable agent outside the bay area boundaries.

4. Buy first, then sell. Bridge loans are back. Erick Berthaldan of MPR Financial said, "The ideal client for one of these loans is an individual who has a large amount of equity in their property and they are preparing to sell their departing residence. Most clients who obtain bridge loans hold them short-term and then refinance out of this loan once their departing residence is sold and they receive proceeds from the sale."

5. Beg, borrow, (but don't steal.) Hitting up your relatives can help in two ways. First, if you are fortunatley able to borrow the entire purchase price for a short term, you may be able to show proof of funds at the time your present your offer and compete alongside all-cash offers. Second, gift funds may help fortify your down-payment and help you qualify for the second mortgage needed to stay in place until you can sell your departing home. Aran Nafisi of RPM Mortgage said, "A common mistake we see buyers make is receiving gift funds from family and depositing them into their bank accounts. By doing this, it creates "large deposits" that appear in the buyers' bank statements. Banks will scrutinize these deposits and require the funds to be paper trailed to prove it is not a private loan. One strategy to lessen the paperwork is to ask the family member to wire the gift funds directly to the escrow company once the offer is accepted." 

Note of caution: If you plan to repay personal loans upon the sale of your departing property, act conservatively. This market is hot, but it can be spotty and it doesn't come with a guarantee. Similarly, if you plan to pay off debt by getting a loan after escrow closes using the collateral of your new home, be careful to talk to your accountant and lender. Your timing for getting the loan in place is important and may help ensure that the loan can still qualify as non-recourse purchase money.

Erick Berthaldan of MPR said it best, "It simply comes down to partnering up with the right real estate company and lender in order to be successful."

Erick Berthaldan of MPR Financial can be reached at 510-527-6146.
Aran Nafisi of RPM Mortgage can be reached at 925-743-3508.
You can find your Berkeley Hills Agent by clicking here.