According to a recent San Jose Mercury News article and the source article in RealtyHop, Oakland was on the bottom ten of a “market health report” showing that nationally, homes are selling for 4.98% less than asking price, making Oakland one of the four Bay Area cities ranked as “the coldest” in the US.
Berkeley Hills pulled the housing statistics for Oakland from January 1 to December 31, 2019, and according to the MLS, Berkeley Hills sees that the median price for a home in Oakland averaged $804,762 with homes selling for 111.83% above asking price. That would hardly make it a “cold market”.
If you look at the data the media is reporting, Berkeley is bucking a national trend of homes in major metropolitan areas getting anywhere from 8 to 2% LESS than asking price. According to the Multiple Listing Service in Berkeley, the average LIST price for a single-family home for December 2019 is $1,296,348, while the average SALES price is $1,296,346, which is 114.89% of the list price.
Further proving that Berkeley and Oakland are far from cold markets, the average days on the market also beat most other national housing markets with homes sitting on the market for only 22 days in Berkeley and 25 in Oakland.
2020 Market Trends
Tracy Sichterman, Broker Owner, Berkeley Hills Realty states, “The market has seemed brisk with more inventory than we usually have in November and December which is good for buyers. Don’t take too much time off from your search for the holidays as we are expecting a boon of listings in January.”
An analysis from real estate site Zillow predicts home values will rise by about 2.2% in 2020. One reason for the tightening market: “underbuilding” of new housing stock because of higher labor and land costs, according to a statement from the National Association of Home Builders. Buyers use caution and an experienced agent when assessing “fixer properties” in this market as contractor costs have also skyrocketed.
A steady drop in the 30-year mortgage rate to about 3.8% last month from 4.9% just a year ago is stoking demand, helped by a cut in lending rates throughout 2019 by the Federal Reserve to sidestep the threats of a potential recession stemming from a slumping global economy and the uncertainties about a trade war with China.
Lower lending rates mean it’s less expensive to finance a 30-year mortgage. Lower financing costs can make it easier for buyers to handle higher home prices.
Asked about where she sees the trend of the market heading into 2020, Sichterman points to some of the recent mergers and acquisitions in the real estate market. “Berkeley Hills Realty is still your local small independent and you can count on our long-standing history in the East Bay market to provide the information you need to make smart buying and selling decisions.”