Thursday, August 27, 2009

Piedmont's 2nd Quarter in Real Estate

The quarter wrapped up with just 21 closed sales (compared to 46 in '07 and 33 in '06), averaging $605/sf, closing in a typical 30 days, at just a tad below the original asking price, on average. The average sales price this quarter was $1.894 million, though homes in this group tended to be quite a bit larger than usual for our market--over 3,000 sf. Prices ranged between $855,000 and $7.8 million, according to the Multiple Listing Service from which these data are drawn, and sold for between 80% of asking price and a remarkable 25% over the asking price.

While only one home sold over $2 million in the first quarter of the year, six sold over that price point this quarter (which in turn accounts for the larger-than-usual size). And note that the average price per square foot, $605 this quarter, is essentially identical to the $606/sf last quarter, and $604/sf for the same period of last year.

If we look at the 10 homes in contract but not yet pending, and the 19 that are on the market right now, it looks like there are good values to be had. Active listings have been on the market for an average 30 days thusfar, at $585/sf. Eight are priced over $2 million, and about half of the total have been on the market for more than 30 days, suggesting that a price cut is in order. Those currently pending were on the market longer, generally, and for a slightly lower asking price per square foot. (Let me know if you'd like a copy of a two-page memo I recently prepared on the over-$2 million market in the East Bay--I've been using it as a negotiating tool when representing buyers in that market.)

[Note that two of the 21 homes sold with confidentiality agreements this quarter, meaning that no sales price information is available on them. See the chart at the bottom of the page for detailed info on this month's sales (and let me know if you prefer getting this material in the e-newsletter rather than the quarter-by-quarter trend data I usually offer). No street numbers included--because we need a little more privacy in this town! Call me to discuss if you'd like more detailed information on sales or the value of your home.]

Flat or declining prices here and elsewhere and tougher lending standards everywhere are making it more difficult for outsiders to move into town, and for those in town to ''move up.'' In fact, I think we're likely to start seeing home sales contingent on the sale of the buyer's current home more frequently, as lenders are less comfortable enabling buyers to buy their new home and only then put their old home on the market. How long can most of us comfortably sustain two mortgage payments? But in the main, serious sellers who price their homes well are still able to come to terms within a couple weeks, and have their proceeds in hand within another 30 days.

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