At a recent Berkeley Hills Realty office meeting, the buzz was about a flood of cash buyers in our marketplace. Grapevine scenarios aside, we wanted to take a closer look at the actual data. After reviewing data for all of the homes listed over $1,000,000 (which have closed escrow within the last three months) we discovered a remarkably high percentage were all cash buyers. Below is a table which includes the researched sales.*

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.

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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

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BERKELEY

 

 

 

 

 

 

 

 

 

 

 

 

 

1149 Euclid

 

$1,200,000

 

$1,080,000

 

90%

 

108

 

65 SOUTHAMPTON AVENUE

 

$1,295,000

 

$1,300,000

 

100%

 

9

 

3064 BUENA VISTA WAY

 

$1,249,000

 

$1,100,000

 

88%

 

40

 

634

WILDCAT CANYON RD

 

$1,150,000

 

$1,225,000

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107%

 

15

 

649 CRESTON RD

 

$1,195,000

 

$1,178,500

 

99%

 

12

 

1062 SPRUCE ST

 

$1,265,000

 

$1,225,000

 

97%

 

14

 

1331 OXFORD ST

 

$1,090,000

 

$1,260,000

 

116%

 

16

 

1456 CAMPUS DR

 

$1,150,000

 

$1,025,000

 

89%

 

15

 

663 VINCENTE AVE

 

$1,075,000

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$1,177,000

 

109%

 

9

 

715 THE ALAMEDA

 

$1,600,000

 

$1,492,500

 

93%

 

39

 

257 HILLCREST RD

 

$995,000

 

$1,070,000

 

108%

 

10

 

435 PANORAMIC WAY

 

$1,350,000

 

$1,169,000

 

87%

 

76

 

2914 PIEDMONT AVE.

 

$1,800,000

 

$1,544,000

 

86%

 

69

 

14 THE UPLANDS

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$1,340,000

 

$1,147,000

 

86%

 

89

 

60 THE UPLANDS

 

$1,490,000

 

$1,450,000

 

97%

 

28

 

2970 AVALON AVENUE

 

$2,200,000

 

$2,100,000

 

95%

 

20

 

2900 GARBER ST

 

$1,075,000

 

$1,110,000

 

103%

 

18

 

OAKLAND

 

 

 

 

 

 

 

 

 

 

 

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2098 LEIMERT BLVD

 

$1,295,000

 

$1,226,000

 

95%

 

13

 

984 LONGRIDGE RD

 

$1,250,000

 

$1,025,000

 

82%

 

107

 

1119 CLARENDON CRES

 

$1,195,000

 

$1,174,000

 

98%

 

20

 

1074 ASHMOUNT AVE

 

$1,325,000

 

$1,292,000

 

98%

 

16

 

408 EUCLID AVE

 

$929,000

 

$1,007,000

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108%

 

9

 

5670 CASTLE DR

 

$2,750,000

 

$2,355,000

 

86%

 

354

 

6201 WESTWOOD WAY

 

$1,650,000

 

$1,465,000

 

89%

 

137

 

6407 GWIN CT

 

$1,849,000

 

$1,560,000

 

84%

 

137

 

6026 PINEWOOD RD

 

$1,250,000

 

$1,185,000

 

95%

 

93

 

5621 FLORENCE TER

 

$1,300,000

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$1,250,000

 

96%

 

50

 

6070 MAZUELA DR

 

$1,375,000

 

$1,300,000

 

95%

 

13

 

631 MOUNTAIN BLVD

 

$1,049,000

 

$1,060,000

 

101%

 

1

 

1907 GASPAR DR

 

$1,080,000

 

$1,060,000

 

98%

 

11

 

9047 Broadway Terrace

 

$1,595,000

 

$1,595,000

 

100%

 

0

 

676 FLORENCE AVE

 

$1,199,000

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$1,150,000

 

96%

 

38

 

5351 LAWTON AVE

 

$1,295,000

 

$1,200,000

 

93%

 

45

 

5341 GOLDEN GATE AVE

 

$1,625,000

 

$1,240,000

 

76%

 

55

 

5901 MANCHESTER DRIVE

 

$1,550,000

 

$1,460,000

 

94%

 

32

 

40 SONIA ST

 

$1,125,000

 

$1,062,000

 

94%

 

14

 

5336 SHAFTER AVE

 

$995,000

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$1,110,000

 

112%

 

9

 

157

KIMBERLIN HEIGHTS DR

 

$1,395,168

 

$1,201,268

 

86%

 

108

 

13835 SKYLINE BLVD

 

$1,650,000

 

$1,425,000

 

86%

 

94

 

14280 SKYLINE BLVD

 

$1,195,000

 

$1,080,000

 

90%

 

52

 

5651 Colbourn

 

$1,199,000

 

$1,135,000

 

95%

 

48

 

614 ALVARADO RD

 

$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.