Tuesday, August 25, 2009

The Piedmont Update (1Q07)

The Piedmont Update

Institution or ''too predictable''?

You know you're a bit of an institution when a long-time Piedmont real estate hand emails you in late March and says, ''Maureen, I know you're e-newsletter's about to come out, and here's what I think . . . .'' So while the message may be predictable (''Prices stay flat! Well priced homes sell promptly!''), I'm bucking institutionism and mixing things up a bit: You'll read this not on the first day after the quarter as monotonously usual, but when virtual marketeers say is the best day of the week to email--

What a quarter! Eighteen homes sold during the first quarter of 2007, averaging 42 days on the market (though 10 out of 18 sold within two weeks). The average price was $1.695 million, in stark contrast to last quarter, when the typical home was much smaller than this quarter's 2880 square feet, and the average price was about $1.3 million. The average on a per-square-foot basis stayed steady at $611-612 between the two quarters.

Eight out of the 18 homes sold for below the original asking price (one for a half million dollars below original asking), but on average, they sold a mini-tad above the original asking price. (Technical term.) The gap ranged between 88% of asking and 133% over asking (yep, my ''stunning success'' [ref. Chron] was merely a ''decent outcome'' in the local market . . . ).

A year ago, 21 homes sold for an average of $1.6 million, though in half the time the typical seller saw for this quarter.

My gut tells me that more homes have been pulled from the market this year than in the past, but a quick check of the data suggests otherwise. Six homes were withdrawn this quarter, but 8 were in 1Q06 (and a few each of the past several years). Sellers drop out of the market for many reasons--a change of heart, a calculated risk, or ''I need x to pay off my loans,'' and the needed offer doesn't materialize.

One final note: the 1Q sales in Berkeley and Oakland were both about 50% below overall sales of 1Q06 based on MLS data, accentuating the national drop of about 20 percent in total sales. That's a huge impact for the income of agents, stagers, loan officers and so on. We've seen a dip here in Piedmont these last couple of quarters, not a drop, though as the experienced real estate hand pointed out, ''what trends can you really draw from such a small sample, anyway?''

The MLS tracks the vast majority of homes sold in the state, though private transactions would not be reflected in these data. County tax records would pick up private transactions, but estimating sales prices from tax records is more difficult, and there is an average six-week lag period before the end-of-quarter activity is reflected in the tax records.

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