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!!! 

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.

(Discovered yesterday while showing clients houses in Rockridge)

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.

I am so thrilled to be with Berkeley Hills Realty.  With small-compay ethics and big-world views, Berkeley Hills Realty has an outstanding reputation in the real estate community which gives buyers and sellers a real advantage.  For the agents, everyone is treated equally and with respect.  From the moment I walked up the stairs of the Craftsman house that I have walked past for years, and into the office, I was greeted with nothing but kindness and consideration, a true testiment of the quality of agents at BHR.

You can now find me at:

Berkeley Hills Realty
1714 Solano Ave.
Berkeley, CA 94707
www.berkhills.com
office: 510-524-9888

http://www.dsnews.com/articles/double-dip-altos-says-prices-have-been-steadily-rising-since-then-2011-06-02

What I find completely hilarious (and true!) is that the article deems the ebb and flow of home prices as the “Catfish Recovery.”

You laugh, but think about it.  As the article references, a catfish is a bottom dweller that moves slow, feeds off of the bottom of a lake or river, then heads up to the surface, then back down, all the while bobbing up and down without a clear direction.  Sounds like some investors I know!

For months we have been saying that that we are seeing prices continue to go down.  But that isn’t true anymore, it really depends on the area and the price range.  For buyers looking in the $550k and under range I am seeing more catfish-like effects with prices; the upper end ($850k and above) seems to be holding steady, probably due in part to low inventory.

Overall inventory has dropped in the past month (down by 1.7%), which is the first reduction since November 2010.  Distressed properties continue to dominate the market, but this is also decreasing.  So while national readings indicate a .93% increase in price, it is important that you look hyper-locally to see what a particular neighborhood is experiencing.