Monday, July 10, 2017

Piedmont Update--2Q17-- 

As mentioned last quarter, we've seen a flattening of the real estate market in San Francisco, and see that now in the East Bay as well.  In the second quarter of 2017, Piedmont saw 48 homes sold, for a typical $2.075 million (median $2.033m; average $2.13m) in an average 14 days on market, for about 15% over the asking price.  Sales typically saw three or four offers, though one 3 BR/1 BA home on Harvard offered at $1.15m sold for $1.7m, with 21 offers! As I've said before, prices for very attractive three-bedroom and 1 or 2-bath homes in under about 1700 sf in Piedmont, Berkeley and Oakland are now at about parity--new for our markets.

A year ago, also during the 2nd quarter, 36 homes sold for a typical $2.2 million (med $2.151m; av $2.255m).  We saw lots of wobbles in the past year so don't get too hung up on that higher number.  Then, the typical home sold in 12 days with three offers, and was 16% over asking.

More recently, last quarter (1Q17), 15 homes sold at a typical $2.15 million (med $1.975m, av $2.319m).  Twelve days, 7 offers, 16% over asking.

So quite a bit of noise in there, but generally, continued strength in the market based on things like price, number of offers, length of time on the market, and so on.  There are still way more buyers for a well-prepared home than there are sellers.

Looking at neighboring Oakland (94610, 11, 18), the market remains robust and up about 10% compared to a year ago.  The typical single-family home in nearby Oakland sold for about $1.35 million this last quarter (compared to$1.35m in 1Q17 and $1.22m in 2Q16).  Throughout, homes sold in about two weeks (they might have sold more quickly, but agents typically advise holding offers at bay until potential buyers have had two weeks to find the house, often through word-of-mouth, and visit).  Again, we see a flattening of the market in the more recent time period.  But no fall-off in buyer demand, and believe me, I've been looking for those signs on behalf of my buyer clients!  

Most recently, I was looking at the over $2 million market in Berkeley.  There has been some buzz about a quieter market, and there have been fewer very high-end homes sold more recently, but that's perhaps because the backlog of higher-end homes and long-held estates held off market during the downturn has come through the pipeline in the past year.  But prices, time on market, price per square foot and sales prices have all held up in the past year, and three months.

Looking more broadly at Berkeley, prices there are up about 6% year-over-year, from a typical $1.2 million in 1Q16 (med $1.165m; av $1.263m) up to $1.275 million this past quarter (med $1.251m; av $1.307m).  Homes there sold in an average 14 days, with 5-6 offers, and about 21% over asking this past quarter.  The number of homes sold is down just a tad this big selling season compared to last, but price increases in that market are strongest in the region this year compared to last.

Click here to see a nice graphic from the Ca Assoc of Realtors regarding trends across Alameda County (prices up 4.1% y-o-y), see below for the statewide market at a glance from CAR (prices up 2.6% y-o-y), and click here for CAR's chief economist Leslie Appleton-Young's recent very detailed economic and housing market presentation to the Oakland-Berkeley Assoc of Realtors.  A few juicy tidbits:  

--the number of sales in the SF Bay Area is down 21% y-o-y (compared to down 13% in SoCal and down 11% in the Central Valley);
--the housing turnover rate (the frequency with which we move) is very low, in historic terms, at once every 10 years. This appears to be because of the boomer generation demographic bubble, low interest rates, the capital gains tax impact at sale, Prop 13/low property taxes, and the lack of inventory to move to;
--we are getting behinder and behinder (that's my attempt to introduce calculus into the discussion) in the ratio of needed new housing units based on demographics, to available or newly constructed housing units.  We are missing about 80,000 needed housing units each year right now.  (And this overarching shortage of supply leads to both long term upward price pressure and decreased affordability);
--the only areas of the state that have seen price increases back above the level of 2006 are in the immediate Bay Area.  All of SoCal, the Central Valley, and the further flung counties in the Bay Area (e.g. Solano, Napa) are still "underwater" relative to their previous highs.

There is lots more there of interest----



Is Now the Time to Re-Fi?

Rates are the lowest so far this year, so if you've been living under a rock these past five years, or have changes in your home equity or job situation that make a re-fi a constructive option, ask me for a referral to my favorite five local lenders.  And you know that federal law prohibits kickbacks or referral fees among your real estate professionals (brokers, lenders, and title companies, for instance), right?  I managed the promulgation of that reg in my former life, as Deputy Assistant Secretary for Policy at HUD......
Honed Negotiation Skills

Trained by the Harvard Negotiation Project (I'm a Harvard grad....), I help my buyers and sellers strike their optimal deal--or walk away. And it pays. In 2015, the typical Piedmont home sold for 8% over asking. My buyers on average paid 7% UNDER asking, while my sellers garnered an average 26% OVER asking. And that's the performance measure I most track.
158 Holly Place in Piedmont Comes to Market! (In April 2017)

If you're looking to simplify your life in a gorgeous storybook-style setting, consider 158 Holly Place, in Piedmont. 


Comprised of four bedrooms and two baths, the home is just a block from Dracena Park and its playground and dog romp area, and four blocks from Fenton's Ice Cream on Piedmont Avenue!

Lots of Fabulous Light  

The East Bay's family light pours into this home through large banks of south- and east-facing windows.  


They also afford great views from the dining room, kitchen,and master bedroom suite. 

 
Surrounded by a hedge, the large flat lush yard is very private.

Anticipate summer while washing the dishes--an apple tree's blooms frame the window over the kitchen sink! Enjoy the tray ceiings in living and dining rooms, and just refinished hardwood flooring throughout.  

When you're ready to entertain, the large formal dining room beckons, but start with cocktails on the remarkably private back patio. 


Close to Schools and Latte  

A better more walkable Piedmont location would be hard to find! Just a couple blocks from highly rated Beach Elementary, and a few more to the middle and high schools, commutes become a breeze. Drop off the kids at school and catch casual carpool to the City, or duck into one of the array of cafe options on Piedmont Avenue, and catch a WiFi-equipped bus to San Francisco. Downtown Oakland is a very manageable bike ride away.  

The elementary school offers on-site before- and after-school care run by the Recreation Department--and summer camps are well-organized and easy to coordinate as well! (Check PUSD for availability at Beach.) 

 Great Layout and Systems; Ready for your Updates  

The home's very spacious master suite addition offers oh-so-rare large closets! And one bedroom includes access to a bonus playroom tucked above the one-car garage.  


The sewer lateral appears compliant; the gutter system, hot water heater and furnace are newer; electrical service is upgraded to 200 amps; and the home is bolted. And there's plenty of attic storage in both wings of this charming one-level home. Move in and relax, and when you're ready, make step-by-step kitchen and bath improvements on YOUR schedule and budget!

Details

--4 bedrooms and 2 baths;
--large master suite with two large closets;
--2161 square feet; big 6399 sf lot (per the assessor);
--garage; and
--great location close to Dracena Park's tot lot and dog run.

Open Friday and Saturday 10 am-4 pm, consistent with the CSL Home Tour hours (see wehelpkids.org for more info and tickets).  And then join Farrow & Ball staff from the 4th Street shop on Sunday, 2-5 pm for info about their high-end paints and wallpapers--Mouse's Back or Elephant Breath anyone?  

On the market at $1.45 million; see 158Holly.com for more photos, and info about additional open houses and broker tours to which the public is invited!

Monday, April 17, 2017

1Q17 Real Estate Update--plus more!

The Piedmont Market

Man it's crazy out there!  The upward push on prices feels unrelenting.  And I say that with a bit of trepidation.  As you know, my view is that the "relocation" of tech ground zero from Silicon Valley to San Francisco/Oakland, together with absurdly low (but nationally set) interest rates for this super-charged region moves us up the supply-demand curve.

We saw 15 sales this quarter in Piedmont (as reported in the MLS), one-third of which were all cash.  The average home sold for $2.32 million (median $1.975m) in only 7 days, at 16% over asking.  This translates into $837/sf.  Prices ranged from $1.28 million to $3.495 million (the latter with a price/sf of $997--this is consistently our high-end or small-house figure).

A year ago, we had so few sales that the information was trash--8 sales, $2.475 million average price, $730/sf, 12% over asking.  I won't event talk about change 1Q16 over 1Q17. 

But last quarter you might recall was consistent with, but a tad lower than, this quarter's activity:  An average sales price of $2.15 million (median $1.85M), secured in an average 14 days at 8% over asking. 

In addition to the ever rising prices and consistently low inventory (call me now to plan for this year's sales cycle!), we also see a shift towards all-cash offers.  As I say to my buyer clients, there is "god's price"--the price that the market suggests--and then there is "the price that gets the house." These days, there's an increasing delta between those two figures.  And buyers have realized that in a rising market, an all-cash offer eliminates the only major risk sellers now face:  That the appraisal might come in lower than the sales price. 

Most successful offers today are contingency free, but offers involving a loan require an appraisal, even if there's no appraisal contingency.  And no buyer likes to be told by a professional that the house is worth less than their offer--even if the buyer has said over and over they are willing to run that risk.  So a classic seller move is to go to the one all-cash buyer and say "we have an offer with a loan at $x; if you meet that price, you get the house." The corresponding buyer move is to borrow $x from mom and dad, and then get a purchase loan to "take out" mom and dad within the first 60 days of ownership.

Unfortunately for my hardworking buyers without family money, this strategy is in play across all price points throughout the "inner" East Bay, at least for highly prized homes and locations. 

Expanding our view, the close-in neighborhoods of Oakland surrounding Piedmont (94610, 11 and 18) saw 88 sales of detached homes, an average sale price of $1.387 million, 12% over asking, $610/sf, in contract in 14 days, and a typical 5 offfers (when reported by the MLS).  Note that $600/sf was the average in Piedmont back in 2006, and again only a couple of years ago.  Looking at 1Q16, these same communities saw 81 sales averaging $1.15 million or $530/sf, and closing at 16% over asking.  This suggests a price rise of about 20.6% over the past year. 

Similarly, Berkeley, which saw the upward pressure before higher-end neighborhoods in Oakland, saw nearly 20% increases in prices 1Q16-1Q17:  The average single family home in Berkeley sold for $1.248 million this past quarter, or $738/sf, at 15% over asking.  A year ago homes were selling for $1.052 million or $650/sf, 14% over asking--an increase of 18.6%.

Key takeaway--the price gap among Piedmont, high-end Oakland, and Berkeley is narrowing compared to years past.

Across California, the CA Assoc of Realtors reports that in February, 2017, prices were up 7.6% year over year (to $479,000), total sales (#) were up about 5%, and days on market were down about 20% (to roughly a month, compared to our week in Piedmont).  So higher interest rates (up about 1/2 percent to 4.18% for 30-year fixed financing) and tougher affordability (the ratio of costs to own to average income declined by just 1% during the year) did not create much drag on the housing market.

Selma Hepp, Pacific Union's economist, does really nice work in my humble opinion, published here.  And if you want to scope out the region's markets, see these data covering areas in which Pacific Union operates--from Silicon Valley to Napa and Sonoma, plus Tahoe and, very soon, Los Angeles.  Remember, I can help you find a great agent to work with outside my Piedmont/Oakland/Berkeley/El Cerrito/Albany turf (I know what I don't know!)--I've recently done that for clients buying in Contra Costa, as well as on the East Coast and in San Francisco.

Got Scrip?  Renovating?

You thought your scrip days were over.  They are never over!  I was at Home Depot recently buying a vanity and sink for my new listing, and was able to benefit the Piedmont schools at 4% of the investment.  Years ago, when I ran the program, I put together a factsheet that emphasized all the ways your classic renovation purchases could drive money to our local public schools. I don't think the factsheet is still around, but check out this website for more--those renovations involve big investments, compared to your weekly grocery bill--Pottery Barn/Williams Sonoma and family pays 8% to the schools!

And While We're Talking Doing Good for Kids----

The Children's Support League annual Heart of the Home Kitchen Tour comes up at the end of the month.  Buy tickets online (through 4/21) here, and don't forget to order lunch.  And give a shout out to colleague Julie Gardner, whose gorgeous Crocker Highlands home is on the tour this year.  We still love her, even if technically she left town! 

And while we're Talking the End of the Month---- 

It's the Heart of the Home tour, so I have a great new Piedmont listing.  Level-living once in the front door, four bedrooms (including a big master with not one but two large closets), two baths, 2161 sf, lots of charming details and a nice big private flat yard. 

Looks like we'll have a special collaboration with Farrow & Ball paints and wallpapers--Piedmonter Terri Ashton is helming their new shop on 4th Street in Berkeley.  More details later, but for now, be the first to email me and receive a copy of the firm's big How to Decorate idea book, by Joa Studholme and Charlotte Cosby!


Another Strategy when Buying

We and your loan officer often recommend looking at a home equity loan to solve the "do I buy first or sell first?" conundrum.  Take a home equity line out on your long-held home, buy the new home outright (looks like all-cash--see above--to the seller) or at least make a hefty downpayment, and then circle back to sell the long-held home and close out your position.  Following this approach typically eliminates the need to move to a rental for a while, pack up twice, board the dog, worry if you will ever find a new home, and so on. 

But home equity lines can take a long while to wrap up.  You could sell stocks, but then you'll pay capital gains taxes.  If you happen to have extensive equity holdings, you could alternatively borrow against your stocks for that short-term liquidity--as an example, Schwab calls this their Pledged Asset Loan.  See this factsheet for their approach, which most firms offer.  Again, once you sell the big house, you circle back and close out the short-term loan.

All this applies if you happen to be thinking about helping the next generation buy into the market--lucky them------ 
 
Baby Clothes for the Needy?
 
Pacific Union's community foundation focuses firmly on those in need, as does that of the Oakland Berkeley Association of Realtors.  Combined, the two distribute about $150,000 annually to non-profits and needy families in the East Bay.  You might not have extra cash, but what about baby clothes?

The OBAR is collecting clean used baby clothes (up to 12 mos) for distribution by local hospitals, social workers and clinics to homeless families and others in need.  If you have clothes languishing in the attic--or have a neighbor who's recently wrapped up that phase of life--just bring the clothes to our office (1900 Mountain Blvd. in Montclair) or to Holmgren and Associates (same address) during business hours.  And if that's inconvenient, email me and I'll pick up!  And....drumroll... this year's clothes are distributed on Mother's Day, so reach out soon.
 
East Bay Plant Sales!

It's that time of year!  Now that the drought appears to be broken, maybe it's time to invest in the garden. 

The East Bay Parks District sale is coming up this weekend at the District's botanic garden near the Brazil Room--click here for more details and a provisional list of available plants.

Merritt College's great sale is coming the first weekend in May. For more details, click here.

And also in early May are two garden tours--Going Native and Bringing Back the Natives--that site also has a list of public and non-profit nurseries specializing in natives.

And finally--

My annual pitch to get out into the East Bay's fabulous parks.  My fave is Sibley Volcanic Regional Preserve (as the guides say, it's not a hip red pepper jelly).  I've spent way too many hours up there thinking about how best to represent my buyers and sellers while walking the dog(s). (No bad news; Gus is at college with the Youngest Son, so it's Doc and me these days.)

But with this year's dramatic rains, the wildflowers are more numerous, varied and later than usual.  The lupines and farewell-to-springs are just coming into their prime, the blue dicks and poppies are ubiquitous, and the shooting stars have shot their wad already.  If you're working on steps, miles and staircases, it's the place to go!