Oakland-Berkeley Housing Market Update May 2017

Discovering El Sobrante, Pinole and San Leandro As Options For Affordable East Bay Living   We all know that inventory is tight, really tight and that multiple offers are so common place in Berkeley that a listing price is merely a suggestion to start the bidding. The median price for a home in Berkeley is $1.1 million. Let’s take a different look at ways to compete in this competitive market if you are looking to be a homebuyer before Fall in the East Bay.   There are opportunities in the market, you just need to expand your horizons at bit. How far? Well, Pinole and El Sobrante are options if you are looking for a bit more inventory and a lower median home price. If you need to commute, there are backroads that can take you from these two northern cities to Berkeley through a beautiful park. Both Pinole and El Sobrante offer benefits for local people looking for local businesses and still are within the commuter circle of the East Bay and San Francisco.   Pinole The median price for single family homes as of April 19th is $470k. Homebuyers who found Pinole in September have already realized a 10% increase in their home value as other East Bay home seekers are discovering this little town. Located 12 miles north of Berkeley and 22 miles from San Francisco, Pinole has a culturally and educationally mixed group of residents and plenty of great neighborhoods. One local resident said It is a very calm city that has small town charm with nice people and you always feel welcome. Pinole has the amenities of a nice town including restaurants, grocery stores, gas stations, banks, good schools, and nearby movie theaters, shopping malls, golf courses, and much more.   El Sobrante El Sobrante has some lovely areas with larger lots, more reasonable prices, and a semi-rural atmosphere. It is slowly evolving into a more sophisticated area,  it is in close proximity to recreational areas such as San Pablo Reservoir and the Briones and Kennedy Grove areas. It is also close to Tilden Park. A big benefit of El Sobrante, versus other towns that are quickly becoming more urban, is the space/land/access to nature than in many other parts of the East Bay. Median home prices have been rising, again, as more homebuyers are looking for affordable housing. The median price of single family home in El Sobrante, according to Trulia, is $420,000.   San Leandro San Leandro is a low key town located about 15 miles from Berkeley. Known for its great weather and central location to Highways 580, 880 and 238, as well as two BART stations, and the Oakland airport, this town has quaint neighborhoods. Residents say they enjoy the proximity to their larger sister cities, but enjoy the parks, the Farmer’s Market at Bayfair on Saturdays, the libraries and lots of places to go biking. The median price of a single family home in San Leandro is $540,000 and is on the upswing in housing prices according to Trulia trends report.   If you are looking for an affordable home, Berkeley Hills Realty has a new listing coming on the market next  week in the $400’s in Richmond in an area called Richmond North and East. Call us for more information if you are interested!   Oakland Now, the good news about Oakland for buyers is that according to both Altos Research and Trulia Market Reports, inventory is increasing and sales price is coming down slightly. Interesting to note, according to Trulia, the median price of a four bedroom home in Oakland dropped 2% year over year, but two bedroom homes increased by 21%. The median price of all homes in Oakland is $606,000. Berkeley Berkeley Hills Realty agents are reporting that homes are still getting multiple offers with over bidding occurring on most homes due to a continued lack of available homes for sale. According to Trulia, the price for a four bedroom home in Berkeley has dropped 13% year over year, much like the Oakland statistics. However, two and three bedroom homes have increased year over year and for all properties, the median price is $1,045,000, a 11.5% increase from 2016. We shall see in next month’s market update if a price softening continues in these two hot markets.   For more information about what is happening across all cities in the East Bay, we encourage you to contact one of our Realtor team members at Berkeley Hills Realty. Read More

How Following Zillow’s “List Your Home” Crowd Could Cost You

Making news this week in the real estate industry was an announcement by Zillow about a new tool for home sellers. The listing portal’s “Best Time to List” tool estimates how much the timing of when a property is listed will influence its sales price, based on the sales history of the property’s local market. “Sellers can use this information to have a more informed conversation with their local real estate agent to determine the best time to put their home on the market,” Zillow said when announcing the tool. Click here to enlarge chart. Everyone knows that the spring is a hot time to sell in San Francisco Bay Area, but Zillow shares specific dates to list your home. However, there are two caveats that Zillow does not include.  If sellers held their listings from the market and took Zillow’s advice, there would be a spike of inventory on the market during the two week window they suggest which would have the exact opposite effect of what benefit they are purporting and “cluster the competition”. Prices would actually drop. The second caveat is that with such low inventory that the San Francisco and East Bay housing markets are currently experiencing, the statistics they are using to find the “best dates” can be a less than accurate data pull.   “Big data works on so many levels in determining what consumers are doing or about to do”, says Berkeley Hills Realty Broker, Tracy Sichterman. “However, when you ask your Realtor, “When’s the best time to list my home?” to get top dollar for your property, the answer is in the local expertise. We have specific knowledge of the Berkeley, Oakland and East Bay market and we track local sales statistics daily.”   “We encourage home sellers and buyers to do internet research”, Sichterman added, “But when it’s time to get the local story with the real time housing statistics for this area, we suggest talking to a local Realtor.”   Berkeley Hills Realty offers complimentary comparative market analysis to determine the value of your home and advice about the selling or buying process. Contact us today! Read More

Buyers May Gain Upper Hand in the East Bay in 2017

Is this the year to consider purchasing a home in the East Bay? This could be the best year to do so in the past five years. Here are three reasons we believe now is the time to buy a home in the East Bay: Rising inventory Reports from sellers Rising interest rates Rising Inventory Inventory has been the big real estate story of the last few years — or rather, a lack of inventory. A shortage of homes for sale, coupled with strong demand, have led to tremendous home-price gains in the last couple of years, especially in the Bay Area. It has also led to fierce competition among buyers. In short, there are plenty of buyers in the market, but not enough properties to go around. Bidding wars and offers above the asking price have been common trends over the last two years. More housing being built An article from August 2016 that appeared in The Wall Street Journal: “Over the past year, the East Bay, which stretches 10 to 60 miles to the east of San Francisco and Silicon Valley, is tied for the fastest growth in new-home developments among major U.S. markets. Sacramento came in at number three, according to figures from John Burns Real Estate Consulting.” A recent report from the California Association of Realtors (C.A.R.) also showed signs of inventory growth. For-sale inventory rose in all nine counties from July 2015 to July 2016. “Increased inventory in the East Bay market, through new home construction and sellers deciding to leave the market, could make it easier for buyers to find suitable homes this year”, stated Tracy Sichterman, Broker, Berkeley Hills Realty.  “Higher inventory could also help create a healthier balance between supply and demand, which would be good for long-term market stability.” Sellers May “Cash in their Chips” “My agents and I have had our ears to the ground in the East Bay market and have spoken to quite a few potential sellers who are thinking now is the time to take the price appreciation they have realized during the past few years and move to other markets in the country like Denver, Portland and Seattle,” Ms. Sichterman shared. With home sellers deciding to “cash in their chips” this Spring, more inventory will become available and thus the high level of multiple offers would most likely recede. “We have had such low inventory for so long, people were bidding up houses sometimes over 15% above asking price. I believe now is the time that the market will stabilize as more sellers place their homes on the market between the end of January and June and buyers will have a shot a making an offer without having to compete in a bidding war,” Sichterman explains. According to C.A.R. president Pat Zicarelli, “Some regions, such as the Bay Area, are seeing an uptick in inventory as high prices are motivating sellers to list their properties for sale.” Rising Mortgage Interest Rates Rising interest rates could also affect the East Bay housing market in 2017. The Mortgage Bankers Association (MBA) expects mortgage rates to rise gradually between now and the end of the year. Freddie Mac expects the same. Here is the MBA’s quarterly outlook for the average rate on a 30-year fixed home loan: Q3, 2016: 3.5% Q4, 2016: 3.7% Q1, 2017: 3.9% Q2, 2017: 4.1% Q3, 2017: 4.3% Q4, 2017: 4.4% In short, 2017 may be the time to avoid the higher cost of homes in San Francisco, San Mateo County and Silicon Valley, and buy in the East Bay where you can get more home for your dollar. If you are in the market for a home, we can send you active listings as they enter the market via email. Just give us a call or email and we can put you on an email list. Read More

October Housing Market Update And A New View On Old Listings

When we bring you our monthly housing statistics, we also look at interesting facts and outliers to show trends that you may wish to use in your strategy of finding or selling a home. This month we found a trend about waiting and being patient. The Facts Since July 1, 2016, 166 houses sold in Berkeley. The majority (135 homes or 81%) sold in twenty days or less. Here is how patience is rewarded: if you wait to see which homes are on the market for 21 days or longer, the competition virtually disappears. The homes that were on the market for more than 21 days, sold for an average of 99% of the list price, but the homes that sold in less than 21 days sold for an average of 121% of the list price. The homes may have took longer to sell because they started at too high of a list price.  Yet the numbers still reflect a relative savings: <21 days = median price of $925,000, with homes averaging 1,981 square feet in size. <21 days = $1,087,400, with 1400 square feet. The difference in the homes that sell quickly is $705.27/square feet versus only $613.80/ square feet for the houses that sat a little longer. The savings is a hefty 13%.   Search Tip For Homebuyers Buyers should revisit homes on the market for 21+ days, as there may be lower price opportunities there available at that time. Make a lower offer! Take a second look, even if you have already been to the first open house. If the available homes are not bid up that extra 21%, you may be able to afford to fix “the thing” you didn’t like when you first saw it hit the market.   Buyers can also look in a higher price point at the properties that have been on the market for 21+ days, as they don’t have to brace for competition.  If you are looking at quickly moving popular properties, we recommend you look 20% below what you can afford in order to be competitive.  If you pay attention to the properties that missed the initial offer date, you can bump the search bracket back up to reflect your affordability.   Sellers-Heads Up Here What the above facts also tell us for people selling their homes, is that when a home is priced correctly THE FIRST TIME by taking the listing agents advice on market conditions that the home would sell quicker for a better price in the current market. Real Life Example: Recently, a home on Summit Road was on the market for 36 days and sold for 103% of the list price (countered up due to seller expectations). The buyers got a deal at $499/ sq. ft.   “My clients who bought Summit needed more space than the 750 square foot place they had in the flats”, stated Romney O’Connell, Realtor with Berkeley Hills Realty. “They asked me months ago whether I thought they could get significantly more space in Berkeley and stay under a million.  In my endless optimism I said “yes” but explained to my clients that it would be a needle in a haystack and you’ll have to make two concessions:  you’ll have to look in the hills and you’ll have to know it will need work.  They were OK with cosmetic work.  As it turned out, my clients were patient and we found the needle. Together we stayed plugged into the new homes coming on and to things they had already seen during their search.  We waited for the deals and I helped them imagine the potential in the homes that seemed unappealing to others.” Local Housing Market Update: According to statistics provided by Trulia the housing market in the East Bay is still on the rise in terms of pricing. For Berkeley the median price for single-family homes is $1,030,00, a 12.6% increase year over year from October 2015 to 2016. For Oakland the median price for single-family homes is $607,500, which is an 8.9% increase year over year. In contrast to the double-digit gains during the past year in Oakland and Berkeley, El Cerrito saw a -1.0% in its single family housing prices. Interesting to note in both Berkeley and Oakland is that rental prices are starting to decrease and number of rentals available are increasing, possibly due to the continued record breaking low interest rates driving renters into the housing market. To learn more about the market in the neighborhoods you may be searching or for further tips and information about listing your home, please call us today at Berkeley Hills Realty at (510) 524-9888. Read More

The One Housing Assistance Program That Can Help You Buy A Home in the East Bay

In most of California, there are several down payment assistance (DPA) programs available. Not all of the options that are available though, are also viable options in our East Bay housing market.  Typically, if you are using any sort of city, regional, or state assistance programs, you sacrifice a bit of your competitive edge while making an offer in our heated market.  So, when researching assistance programs, choose the programs that keep you in the game, as opposed to the ones that will take you out. How do you get taken out of the homebuyer game? Most assistance programs in our area do not get accepted due to the competitive landscape currently prevalent in our market combined with the extended close of escrow times which most assistance programs require. When the market is hot, a seller won’t wait for a buyer who needs 45 days to close escrow. A Program That May Work For You With all the programs that are out there, we are alerting you to one specific assistance program, the GSFA Platinum Program.  This program doesn’t delay closings, is open to the most buyers, is not first time homebuyer specific, and is free money from the state (meaning you don’t have to pay it back…ever). On top of this, it’s also the easiest assistance program to qualify for, making it the most realistic option for potential homebuyers in our area. Typically, assistance programs have pretty stringent requirements on income, where this program has the most favorable income limit of any assistance program.  When dealing with Bay Area salaries, this is really the only realistic option out there. “What I have found, is that if buyers try to go another route with an assistance program (CALHFA or the like), it will typically push them out of our market due to competition and pricing.  All assistance programs are great, and much more successful, in a lesser competitive environment than our own.  So, I provided this information about the GSFA Platinum Program to focus on an option that was actually useful and tangible in our area,” said Dominic Villa, Summit Funding. Elements of the GSFA Platinum Program: The program is basically a grant, so it is essentially a gift from the state of California. That means, and this is the best part, you don’t have to pay it back!  It’s essentially free money! It will gift you up to 5% of your loan amount to be applied towards either the down payment or closing costs. However, they do charge a 1.5% fee, so it effectively means they are only gifting you a maximum of 3.5% of the loan amount. Not limited to first time homebuyers– Anyone is eligible for this, as long as they are purchasing a new primary residence. Higher income limits than any other assistance program out there (as long as you go with a conventional mortgage), which bodes well for higher income earners in the Bay Area. Most assistance programs are immediately ruled out due to income limits, because the average income is higher in the Bay Area compared to most other places in California. Time is on your side-this program doesn’t slow down your close of escrow time. Typically, with a down payment assistance program, it will require a long and intense process that will make your close of escrow 35 days or more, which is detrimental in a competitive market when time mean everything if you are making offers on properties with multiple offers.  This program has a seamless approval process, so a 21-day or less close of escrow is still very possible with this program! Smaller downpayment required-This program could be a fantastic option for a younger buyer trying to get their first place and may be a little tight on funds. Caveats to this program: The buyer has to have a minimum of a 640 FICO score and a homebuyer education class is going to be required if the purchaser is a first time homebuyer. There are income limits (although higher than other programs), so a buyer could potentially be ineligible for this program if they make too much money. Berkeley Hills Realty assists homebuyers in finding the best local mortgage professionals. Thank you to Dominic Villa, Summit Funding, for his help in creating this informative article for us! You can reach Dominic at [email protected]   Read More

What Happens to an Escrow When Disaster Strikes?

  It seems like natural disasters are in the news quite bit these days. This article on the California Uniform Vendor and Purchaser Risk Act (Cal. Civ. Code § 1662), helps answer questions about what happens if disaster strikes during escrow. The Uniform Act is worth knowing about, as it may help put buyers at ease once all contingencies have been removed.   Firestorms: Basic Real Estate Legal Issues Read More

Rent Disenchantment

Is it time to start thinking about owning a home? Shelter-seekers in Northern California often choose to rent, but there is some debate about whether or not renting is actually the best financial option. Spoiler Alert: Real estate professionals tend to think buying is the answer. Here are a few places where you can follow the discussion, look at the numbers, and decide for yourself if renting or buying is the right choice for you. According to “You’re Making Your Landlord Rich” by David Cross, California renters tend to spend more each month than homeowners. To bring it even closer to home, he reports that “Alameda County renters pay an additional $332/month.” “I left my heart in San Francisco…As I Move to the East Bay”– Trulia makes the case that buying in the East Bay will get you the best deal if you are switching from renting to buying in the Bay Area. Try the New York Times buy or rent calculator to help you crunch the numbers. If you do decide it is time to own your own home, give us a call at Berkeley Hills Realty. We’ll help you find a home that fits your budget and your lifestyle. Read More

Buyers Are Back– But Where Are The Sellers?

First, the good news: Buyers are back. People are talking about the return of multiple offers. With rare for-sale-sign sightings, a few lucky sellers are reaping the rewards of robust competition. But, where are the rest of the sellers? There are several aspects of the current economic climate that continue to keep homes off the market. Why Sellers Hold Back: Family Matters: Families who want to move may have their money tied up in the equity of their current house. In the past, there were lots of lenders who would give them short term “bridge” loans. Bridge loans allowed the family to buy a new home, move out, and then sell the original house. Some bridge loans still exist, with tighter restrictions: the homeowner must qualify to pay the mortgage on both homes. In the past, some rental income value was attributed to the old house which helped with the income qualifications. Now those options are gone for many. What this means is that these homeowners must decide to sell their home first, without having a home to move into. The family then rents while they look for a new home with the liquidated equity from their first home. This is harder on families because often it feels too difficult to risk moving their children twice, particularly if the moves may put them in and out of different school districts. Less Equity: Many homeowners have lost equity because of market decline over the past several years. If these homeowners don’t have a compelling reason to move, it is unlikely they will choose to sell at a loss. Many of these homeowners prefer to hang tight until the market improves and they gain back some equity. Decreased Ability to Borrow: Buyers who may have expected to move up the property ladder by now feel stuck when they find out they qualify for fewer loans. Many buyers qualify for less money because they have lost jobs or elected to take pay cuts to keep their current job. Other homeowners got into their current homes with sub-prime mortgages. Those options are gone, and therefore that ability to leverage a property is gone too. Lenders have also tightened up the qualification process. Even after several years of good behavior, making every payment on their existing mortgage, some borrowers are still qualifying for less now than they could seven years ago. This hurts homeowners who want to move up and those who simply want to take advantage of the current low rates. They may want to refinance, which would reduce their monthly payment. Yet, they can’t qualify for the same mortgage loan amount with a lower payment. Why Banks Hold Back: Many economists are concerned about “shadow inventory.” Shadow inventory is the inventory that banks are holding back from the market. Banks hold back for a number of reasons: Market Depreciation: Banks are concerned that if the foreclosed inventory hit en masse it would depreciate the market and make all their real estate holdings worth less. Bookkeeping and Timing: It can be worthwhile for a bank to delay foreclosure in order to retain the positive asset of an existing loan, rather than reporting the loss to their investors. Government Incentives: Big banks delaying foreclosure can still qualify for incentives from the federal government for continuing to “help” homeowners in distress. According to Nick Timiraos of the Wall Street Journal, “banks owned about 450,000 properties at the end of March, but there were an additional two million loans in some stage of foreclosure and around 1.7 million more where mortgage payments hadn’t been made in more than 90 days.” If you are considering selling, talk to a Realtor. Our local market is buzzing and you might be surprised by your home’s current worth. This buyer frenzy might be a blip worth cashing in on. A true real estate market rally will likely be slow and will depend on a more robust economic recovery and on more private investors coming forward to fill the lending gap. Lending conditions were too loose in the past and needed to be reformed. However, now the pendulum has swung far in the opposite direction. Tight lending is making it difficult for homeowners and therefore the housing market to move. Read More

Why get a pest report?

So many new buyers ask me why they need a pest report. It’s simple. Houses are made from wood and pests like to eat wood. So here are some telltale signs of termite infestation. If you find a pile of what appears to be insect wings you might have a termite colony nearby. An infestation can be found anywhere there are wood-bearing structures inside or outside including window sills, door jams, crawl spaces and attics. Termites shed their wings once they colonize and can often be mistaken for flying ants. However, the most obvious sign of termites are termite mud tubes. Termites will often create tubes or tunnels so they can move around. Look for these where your home meets the soil. You also may find mud build-up around the exterior of your home. And if you find softening of wood, you might have termites. Wood that falls apart, flakes, or turns to dust can be a sign of termites. You can tap on your wood to see if it sounds hollow and if it does, this could indicate termites. These are all signs that you need to do a termite inspection. It’s important to do your due diligence before buying. And if you are selling, why not obatin a report so you can minimize any surprises during escrow? A pest report starts anywhere from $275 and can go up to $900 depending on the size of the home. written by Gina Odom Read More
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