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

7 Reasons Why Now Is The Time To Sell In The East Bay

As we all know inventory of existing and new homes in the Bay Area has been at historic lows, which has benefitted homeowners as price appreciation has risen steadily over the past six years, especially in the East Bay. However, a rise in interest rates, thanks to the Federal Reserve, combined with a shaky political atmosphere, combined with homeowners thinking now may be the time to cash out is almost certain to increase housing inventory for 2017. For prospective sellers that means that if you were planning to sell your home this spring, it’s time to get a move on! Here are seven reasons why now may be the time to sell in the East Bay. 1. Low inventory Inventory of homes in both Oakland and Berkeley dipped steeply in the fall and while Oakland still has a few new homes for sale, according to predictive analytics provided by Altos Research, Berkeley is currently seeing a spike of new inventory over the past two weeks. Are sellers already racing to put their homes on the market to take advantage of pent up buyer demand? We think so. 2.  Equity is on Your Side When the housing bubble burst, home values plummeted, sending many mortgages underwater. Thankfully, the tide has turned: According to CoreLogic, only 8% of homes with a mortgage had negative equity in 2016. If you’re not sure where your equity stands, ask one of our Realtors to run a free comparative market analysis (CMA) to determine an approximate value for your home.  Most likely, your home has appreciated significantly if you have owned it for more than five years. 3. Home Price Appreciation “With the kind of home price appreciation the East Bay has experienced in the past ten years, with many owners realizing over 40-50% gain in value, I am hearing that sellers are thinking it’s time to cash in their chips and move out of the area”, stated Tracy Sichterman, Berkeley Hills Realty. Homes in Oakland which at the bottom of the market in 2009 were selling for $300k are now valued at over $600k and are owned by sellers who can now sell their homes and buy a home outright in many markets in the US. For sellers in Berkeley who purchased their homes at the median price of $555k in 2009, they have experienced a 50% price appreciation now that the median price of a home is at $1.1 million. “Many Northern Californians are deciding to go to housing markets that have much of the vibrancy that they have enjoyed in the past, but can be found elsewhere for half the price of housing in the Bay Area such as Denver, Seattle, Austin and Portland and they can put money in the bank, too,” Sichterman pointed out. 4. Buyer urgency Buyers have consistently been challenged with rising home prices, lack of inventory, multiple offers and now rising interest rates. The buyers in the market right now are ready to go and are out searching intently, meaning days on the market are still under 45 for most homes that are priced well. The Fed has all but promised more interest rate increases in 2017. “Mortgage rates going up is a bit of euphoria and optimism over [Trump’s] promise to lower taxes, increase infrastructure spending and drive 4% economic growth,” says Nela Richardson, Chief Economist at Redfin. Buyers who are stretching to meet debt-to-income ratios won’t be able to wait, putting them in a “hurry and buy” in 2017. 5. Spring Market, Busy Market In the Bay Area, most homes are sold at the best price in the spring, between mid- February and early June. Capitalizing on this market to get the best price for your home is just a smart move. 6. Transfer Base Taxes Have you ever said to yourself, ”I can’t sell my house because my property tax base is so low, I don’t want to lose it”? Are you over the age of 55 or disabled? Did you know you can transfer your property tax with you to your new home? Proposition 60 allows transfers of base year values within the same county (intracounty). Proposition 90 allows transfers from one county to another county in California (intercounty) and it is the discretion of each county to authorize such transfers. Locally, Alameda, San Mateo and Santa Clara County are counties that accept the tax transfer if you are 55 years of age or older. Proposition 110 provides transfer of property tax if you are disabled. These three Propositions were put in place to help seniors avoid being trapped in a home because they could not afford to move due to higher property taxes on a new home. By taking the base tax of a primary residence with them, older homeowners can make the move with less financial hurdles. thus also making move up homes available to new home buyers. Here is more information about Propositions 60-90-110: 7. Washington’s New Administration The likely political changes as a result of the Trump administration could have an impact on both buyers and sellers. “Trump basically made his campaign oriented around uncertainty,” said Ralph McLaughlin, chief economist at Trulia. Sellers who don’t want to wait to see “how it all turns out” may decide now is the time to cash out, which will place more inventory on the market, which will lower prices. f you would like to have one of our agents run a CMA on your home and discuss the market activity in your neighborhood, please contact us today! Read More

Election Results And Home Sellers

Housing market jitters during an election year are predictable. Even in less pugilistic eras, Realtors® have long noticed that home buyers and sellers cool their heels during presidential election years. Why? Because people are uncertain about what a new president will mean for the real estate market, and the U.S. economy as a whole. So they figure it’s wise to maintain a holding pattern until the next president is locked in place. Now that the election is over, people are still in a state of uncertainty and the housing market has been adversely affected as interest rates have moved higher, up to 4%. ‘It is early on, but I believe the initial effect for California home sellers will be negative, at least in the short-term,” stated Tracy Sichterman, Broker/Owner of Berkeley Hills Realty.  “We have early anecdotal reports of buyers backing out of contracts or stopping their active search until “the dust settles after the election.” Interest rates also jumped .25% which has a direct relationship on buyer affordability. As a result, we may see a slowdown that surpasses the seasonal fourth quarter norm.” The Trump victory has caused a major market reaction, with both stock and bond prices rising sharply. As previously noted, this led to a .25% increase in long term interest rates. “Conforming 30-year fixed rates will be in a 3.75-4.0% range for ideal scenarios, versus 3.5-3.75% earlier this week. It is too early to tell if this trend will continue or if we’ll have a reversal soon”, wrote Sam Krueger, Branch Manager/Mortgage Advisor, Pinnacle Capital Mortgage. The bond markets have also responded by treasury yields leaping on expectations of a rise in inflation and growth. The 10-year yield climbed above 2 percent to hit its highest since January 15th. Higher mortgage rates can throw a wrench into an already shaky housing recovery. Home prices have been rising dramatically in the past few months, largely due to a lack of homes for sale. During housing’s recovery from the worst crash in history, historically low mortgage rates allowed prices to gain quickly. Current buyers may find optimistic nuggets in the immediate election fallout. As some of the competition heads back to the side-lines, there may be an opportunity for the determined buyer.  Although interest rates have crept up slightly, this will be remembered as a historically low rate. Also, President Elect Trump champions tax reform, but has not put mortgage interest deduction on the table, so a change to the mortgage interest deduction is unlikely. For home sellers, the market may soften somewhat in the coming months. “Nonetheless, my advice to home sellers is to plug forward on the market and see what the response is. If there is a market correction or slowdown in the coming year, this may be the height of the market– even if less vigorous than before the election”, stated Ms. Sichterman. On the plus side, we just posted an optimistic blog that quotes a continued, although more modest gain this year.  More here   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

Berkeley Home Sellers Think ‘Staging’

We all know the feeling – the one where guests are due and you haven’t had time to clean the house. You shove all the…well… stuff into the back bedroom and shut the door (you’d lock it if you could). Now imagine that feeling times 10. If you are trying to sell your home this spring, and you have rooms full of that…well…stuff — you’re in for exactly that. You can prevent it all with just a touch of the staging approach for your Berkeley home. Not everyone has $5,000 or more to spend on professional staging, but then again, you can’t offer your home in “lived in” condition and expect to have buyers racing to write you their high-priced offers. There are many staging companies that can work within your budget as well, so, if you only have a few thousand to work with that is better than nothing. And often times, a stager or Realtor can incorporate your stuff to save on costs. Real estate is in large part an emotional selling proposition – beyond their basic housing requirements, buyers want to see themselves living a better life in their new East Bay home. The quickest and easiest way to make that possible is to simply get rid of that same stuff! Here’s an easy example: while a messy home office – one stuffed with papers and files – will cause many potential buyers to think too cramped for me, a well-staged home office helps them imagine their own paperwork in control. To achieve a look that’s clean and simple, box up your files and clean out the dust bunnies. If you have allowed extra furniture to accumulate (like that folding table in the corner that holds last year’s tax records), go ahead and de-accumulate it! Staging of any kind may not be your first choice for how to spend an afternoon, but selling your home is a business transaction, and when you approach the process confident that a little elbow grease will go a long way, your pocketbook will register the difference. If you are, in fact, preparing for this spring’s selling season, contact me to discuss practical strategies for economically handling the repairs, remodeling, and staging that will speed the sale of your home. written by Gina Odom, Realtor 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

Seller Incentives: Your Bank May Pay You to Sell Your House

  Banks have discovered that it is better to give than to receive. Receiving a home through foreclosure has proven expensive for the lender. According to Freddie Mac, an average foreclosure costs a bank $60,000. Instead, bottom-line sensitive institutions are giving cash incentives to encourage homeowners to cooperate with a short sale. A short sale is a sale in which the bank agrees to let a house sell for less than the amount of their outstanding loan. Bank of America is offering 5k-30k Chase is offering 10k-55k on their older WAMU products. Wachovia and Wells Fargo Financial: 5-15k In addition, the Home Affordable Foreclosure Alternatives (HAFA) program provides $3,000 in relocation assistance at the close of an FHA short sale. Don’t Sell Yourself Short The summer market has been sizzling and one surprising beneficiary has been sellers who had assumed they were in for a short sale. Some recently listed “short sales” have received multiple offers. Through the miracle of competition, the price has been driven up enough in some instances to bridge the loan gap and turn the short sale into a traditional sale. This is great news for sellers’ resulting credit. Don’t assume your house is underwater. The tides are turning. 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

Vacant Home Targeted — Realtor Responds

Tonight’s excitement: I am representing buyers in the purchase of a home at the end of my street. 9:18 p.m. the buyer informs me that he has been to the property and noticed some suspicious things; a previously locked gas meter hatch is now open, there are some triangular glass cuts near a kitchen window lock, and a bedroom closet window is left ajar. I immediately call the police. Responsive men-in-blue arrive in minutes and I hand over keys to the property. I stand back, way back (more like several houses back), until they confirm that the coast is clear. Then, I take inventory while they dust for prints. Nothing appears taken, no proof of bad guys inside the house… so the incident is just reported as a “suspicious event.” No harm, but a bit of adrenaline pumping anyhow. Break-ins at vacant listings are on the Realtor radar as a growing concern. Best tip of the day: The officers recommended that real estate agents visit the station and register the address of any home that is not occupied. You can also leave a key at the station, but this is not required. This helps them keep an active look out for suspicious activity. Tomorrow I plan to do this for all my listings. This service is also available to any vacationing or otherwise absent resident. Be safe and let’s all look out for each other. Read More
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