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.
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
|
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
|
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
|
$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
|
$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
|
|
|
|
|
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
|
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
|
$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
|
$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
|
$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.
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