43 homes on tour this week from Richmond – Oakland.  Up a tiny bit from last week, but not much.  Low inventory continues to lead to multiple offers on many homes.  It also seems like there are more traditional sales and less distressed in the past few weeks.

The answer is yes.  According to the article “home prices have plummeted 34%,” “mortgage rates continue to hover around record lows,” and “homes are more affordable than they have been in 40 years.”  All of this is true.  HOWEVER.  Yes there is a but.  One thing we are experiencing that other markets are not is multiple offers which are artificially increasing home prices.

Our inventory levels, unlike many areas, are really low, as low as I have seen in 9 years of real estate.  Inventory is down about 50% from what we might normally be seeing this time of year.  Because rates are down, and prices are down, and affordability is high, there are a lot of buyers.  Buyers need housing inventory and when the demand is higher than the supply, prices go up.

What’s happening:

• NOBE (North Oakland/Berkeley/Emeryville) is especially hot right now.
• A recent Albany sale had 7 offers and went $80k over asking.
• A house in the Berkeley hills currently has 64 requests for disclosures.
• A dump of a fixer in Berkeley had 4 offers and closed with conventional financing!
• A sweet 2 bed house in Rockridge just had 8 offers.

Low low inventory means fewer houses for us to preview.  I don’t recall, with the exception of nearing a holiday, the numbers ever being so low.  Unbelievable.  It is no wonder we are seeing so many multiple offers.

Click here to see a copy of this weeks tour:

Tour page1

Tour page2

S E L L E R S : this is the time to sell!!! 

“Keep in mind that there will be a pretty hefty lock extension fee  if an escrow extends past the original lock period. Any delays could be quite costly to the buyer.”

Attention buyers: don’t delay on jumping in and starting your inspections and negotiations, and be you and your agent stay on top of your escrow timeline.

The Albany market is getting hotter now that the New Year is underway.  Based on current levels of supply and demand I don’t see the trend in price increasing much, if at all.  I can’t believe that last month the Average Sales Price for Albany was in the mid-$350k range.  But with a large amount of condo sales in the sub $350k range, and a sale above $1.1mil, Albany’s numbers are quite skewed.

While I don’t think that we will see prices in Berkeley or the surrounding areas decrease significantly, I don’t think we will see much increase either.  With rates continuing to remain low there is no reason for buyers to make rash decisions.  Buyers are indeed picky.  And they are patient.  Because of this, they will wait.

There is talk of an influx of foreclosures hitting the market.  This doesn’t surprise me.  I think we will see more short sales, but the days on market for short sales will decrease.  Not because the banks have their systems in place, but because more sellers will lose their home to foreclosure during the process.  The one thing to watch is that banks are starting to promote short sales for their distressed clients, and are proactively calling owners to see if they would like to short sale their home.

I think the allure of investors seeking foreclosed properties will continue to rise.

2011 brought a ton of cash buyers.  As the economy attempts to recover, cash purchases in all price brackets will continue.

One demographic that is being hit is the younger market, the 30 – 34 year old market.  Loss of jobs, loss of appreciation, and student loans out of deferment, homeownership amongst this age bracket is falling faster than any other.  This is a market that I service, and I have definitely seen a shift in the mindset of the 30-somethings.

Sellers are discouraged.  They are fearful.  They are worried that prices will never go up.  Those who don’t need to sell, won’t.

This all sounds pretty grim, doesn’t it?  Well come on now, the economy is still in the pits.  Did you think real estate would be any different?  The good news is that if you are a seller, there are a TON of buyers who are well-qualified.  If you are a buyer, rates are still at an all time low.  And with rents projected to rise, now is the time to cash in on some real estate wealth.

Wherever your real estate path may take you in 2012, I wish you good health, happiness, and a hot cup of tea by a cozy fire.

Cheers!

Yes, cash!

I just had a listing in Berkeley that received 6 offers, 2 were all cash.
My 2-bed El Cerrito listing received 4 offers, 1 was all cash.
Another listing of mine in El Cerrito received 2 offers, 1 was all cash.
My clients just presented an offer on a cute house in Berkeley, they lost to all cash.

Where is everyone getting so much cash!!??!!

I asked some people and here is what they said:

1) “My parents gave us the cash, we are paying them back.”  (couple, 34 and 35 years old)
2) “We pulled all of our money from the stock market in 2010.” (couple, 41 and 44 years old)
3) “Stocks and 401K.” (39 year old single woman)
4) “We have saved for 6 years.” (38 year old and 44 year old couple)
5) “My company gave me a loan.” (46 year old single man)

Guess there is still some cash floating around in the Bay.

In addition to propping up the ceiling, which dropped to $625,500 on Oct. 1, the Senate amendment would also restore through 2013 the formula in use during much of the downturn for determining the upper loan limit in high-cost housing markets.

This is great news for the Bay Area!

The conforming loan limit determines the maximum size of a mortgage that Fannie Mae and Freddie Mac can buy or “guarantee.” Non-conforming or “jumbo loans” typically carry higher mortgage interest rates than conforming loans, increasing monthly payments and hindering the ability of families in California to purchase homes by making them less affordable.