Through a search of tax records we were able to determine which homes had a recorded first deed of trust, which evidences a loan on the property. All recorded loans were noted. For the properties which did not have recorded loans, we contacted the listing agents directly to confirm that the offer was presented as "all cash." Our research confirmed that of the 42 homes listed in Oakland and Berkeley, 13 were presented with all cash offers. 31% of the buyers paid all cash. Nearly one in three homes in this demographic is selling to an all cash buyer. Many others had down payments that were greater than half the sale price.
Many of the homes received offers within the first weeks of marketing. As a result, some homes sold for more than their asking price. Buyers have returned, but they are not relying on government incentives to do it. The Economic and Housing Stimulus plans have not helped the upper end of our market. First time buyer tax credits and FHA backed conforming loan programs most often do not apply to homes sold over one million dollars. Currently, jumbo loans are more difficult to obtain and often have undesirable terms. There is nothing in the current bailout that supports the luxury real estate market. Cash has stepped into this void.
Local Realtors are still reflecting on the effect the influx of cash offers will have on property values in the area. Some sellers are willing to significantly discount the price of their property for the benefits of a sure thing and a quick close of escrow. In multiple offer situations, often an "all cash" offer is accepted even though it is not the highest offer the seller has received. Many believe cash is keeping neighborhood values artificially low.
Others feel that cash transactions help support property values because the post-mortgage-meltdown loan process often diminishes value. Banks are exceedingly cautious and our unique housing stock is difficult to appraise. Appraisers have trouble finding comparable homes which fit the lenders confined criteria. Buyers often renegotiate the contract price to reflect the lender's low appraisal.
Pending sales are up 20% over last year in the national market (see our last post.) More inventory is expected as the recession begins to create its own wave of foreclosures in the upper end, a market which had been the least affected by the original mortgage crash. In balance, any mix of buyers will help our housing recovery as faith in the market is restored and more homes exchange hands.
| Address | Original Price | Sold Price | % | DOM |
| | | | | |
| 1149 | $1,200,000 | $1,080,000 | 90% | 108 |
| | $1,295,000 | $1,300,000 | 100% | 9 |
| | $1,249,000 | $1,100,000 | 88% | 40 |
| 634 | $1,150,000 | $1,225,000 | 107% | 15 |
| | $1,195,000 | $1,178,500 | 99% | 12 |
| | $1,265,000 | $1,225,000 | 97% | 14 |
| | $1,090,000 | $1,260,000 | 116% | 16 |
| | $1,150,000 | $1,025,000 | 89% | 15 |
| | $1,075,000 | $1,177,000 | 109% | 9 |
| 715 THE | $1,600,000 | $1,492,500 | 93% | 39 |
| | $995,000 | $1,070,000 | 108% | 10 |
| 435 PANORAMIC WAY | $1,350,000 | $1,169,000 | 87% | 76 |
| | $1,800,000 | $1,544,000 | 86% | 69 |
| 14 THE UPLANDS | $1,340,000 | $1,147,000 | 86% | 89 |
| 60 THE UPLANDS | $1,490,000 | $1,450,000 | 97% | 28 |
| | $2,200,000 | $2,100,000 | 95% | 20 |
| | $1,075,000 | $1,110,000 | 103% | 18 |
| | | | | |
| | $1,295,000 | $1,226,000 | 95% | 13 |
| | $1,250,000 | $1,025,000 | 82% | 107 |
| | $1,195,000 | $1,174,000 | 98% | 20 |
| | $1,325,000 | $1,292,000 | 98% | 16 |
| | $929,000 | $1,007,000 | 108% | 9 |
| | $2,750,000 | $2,355,000 | 86% | 354 |
| | $1,650,000 | $1,465,000 | 89% | 137 |
| | $1,849,000 | $1,560,000 | 84% | 137 |
| | $1,250,000 | $1,185,000 | 95% | 93 |
| 5621 | $1,300,000 | $1,250,000 | 96% | 50 |
| | $1,375,000 | $1,300,000 | 95% | 13 |
| | $1,049,000 | $1,060,000 | 101% | 1 |
| | $1,080,000 | $1,060,000 | 98% | 11 |
| 9047 Broadway Terrace | $1,595,000 | $1,595,000 | 100% | 0 |
| | $1,199,000 | $1,150,000 | 96% | 38 |
| | $1,295,000 | $1,200,000 | 93% | 45 |
| | $1,625,000 | $1,240,000 | 76% | 55 |
| | $1,550,000 | $1,460,000 | 94% | 32 |
| | $1,125,000 | $1,062,000 | 94% | 14 |
| | $995,000 | $1,110,000 | 112% | 9 |
| 157 | $1,395,168 | $1,201,268 | 86% | 108 |
| | $1,650,000 | $1,425,000 | 86% | 94 |
| | $1,195,000 | $1,080,000 | 90% | 52 |
| 5651 Colbourn | $1,199,000 | $1,135,000 | 95% | 48 |
| | $1,495,000 | $1,495,000 | 100% | 13 |
| Totals | $1,360,337 | $1,280,125 | 95% | 49 |
*Note: We have left the financial research off this chart to protect the privacy of the individuals involved. Data is pulled from the Multiple Listing Service. Berkeley Hills Realty may not have participated in the sale.
Editor's note: Luxury homes in Berkeley and Oakland are not unique in attracting cash buyers. A recent home located on Carleton in Berkeley received seven offers, five of which were all cash. This home was listed for $425,000.
