Thursday, November 18, 2010

Another View on Window Replacements

The National Trust's e-newsletter reports today on the downsides of increasing energy efficiency. Sometimes it's tough to balance the eco agenda with the preservation agenda.

The eco-ists often talk about the annual utility bill savings as the argument for replacement; the remodeling crowd will talk about the high "cost vs. value" ratio (meaning forget miniscule utility savings--the big bucks are in the higher price you'll garner when you go to sell your home).

The preservationists argue that original is beautiful, and it's a shame to lose all that great aesthetic and historic value just for a few dollars. Don't forget--those aluminum windows that the Piedmont building inspector will cite you on were once the New New Thing.

Let me know your thoughts!

Wednesday, November 3, 2010

Time to Get Apples

A Piedmont friend who I helped make a purchase in Inverness last year made the questionable decision to let me pick apples and pears from her trees out there. So I've been making applesauce cake, and apple-rhubarb crumble, with rhubarb from our Inverness garden these last few weekends (while closing some of the more complex transactions I've had the honor of handling these last few years). If you too love apples, Sunset had a story this month about day tripping (no pun intended) to apple-centric Sebastopol--see the story here and don't forget to call me if you have an interest in West Marin real estate--I have very insightful and deeply experienced realtor contacts out there to help you with a purchase.

Appraisal and Inspection at Divorce---

Did you see this short story in the New York Times this week? The key take away is that if you need to estimate value for any reason (including the passing of a relative, etc.), it's good to hire an inspector in addition to your appraiser--

I'll let you in on a secret: I know that there is dry rot at the junction of our rear deck and a shingled pony wall near our property line. It will cost money to fix (and will be fixed before we sell!). It will not be cheap. But if I needed a good estimate of value on this classic 1907 shingle home with its share of quirks, I'd want to reflect that anticipated expense. A mere $600-750 for an inspection (and I have great referrals for you) might save a bundle of heartache and recriminations later!

Note that Nina Johnson, a great networking colleague whom I've written about before for her personal organizing expertise ( put me in touch with a wonderful advocate for a seriously ill neighbor (What in-home care does Kaiser cover? What should I ask my case worker for? Whom do I call for in-home nursing care? How is that different from care from an aid?), along with an architect who specializes in ADA and other accommodation ideas. Let me know if you're facing some off these issues locally and I can pass on these contacts.

Scouting for Food Pickup Nov. 20th

Piedmont's progressive Boy Scout Council provides a key administrative umbrella for a wide range of Piedmont youth activities--Oakland Strokes, Piedmont Language School, the High School's Community Service Crew, and the Boy Scout programs all operate under its purview.

But maybe the way the Council touches the most lives across the region is during the Scouting for Food Drive.

On Saturday November 20th, yours truly and a number of other adult and scout volunteers will fan out across Piedmont to pick up your donations of canned goods and staples.

If you'd rather join me and go electronic this year, consider a contribution to the Virtual Food Drive: go to this link, read and click on the ''more info'' link, and choose ''Piedmont Council, BSA'' from the Alameda County Food Bank's drop down menu. You can shop for needed staples virtually, or cut to the chase and just donate. This year perhaps more than ever!

And if you forget or know you'll be out of town, just email me and I'll swing over to pick up your canned goods.

Will You Be in Town on Thanksgiving?

Then you have two choices: Run/walk the 5K race, a course monitor! It's a very limited time commitment. You get your corner assignment, show up with your chair and coffee mug in hand, watch all your friends and neighbors pass by, and then head home for breakfast! Email Susan Freeman ( if you have the time, and enjoy!

A great way to support lifetime exercise among Piedmont youth--the funds underwrite the PHS Track and Cross Country teams.

Wrapping Up a Renovation

Stopped in at the sleek mid-century home of clients who bought a couple of years ago and are getting close to wrapped up on their renovation, with the help of Piedmont architect Ahmad Mohazab ( What a gorgeous architectural update and what wonderful surfaces!

When I got home, I remembered I'd pulled The Punch List out of Consumer Report's latest Kitchen Planning and Buying Guide (why do I read this stuff given we finally wrapped up our kitchen and bath remodels over a year ago?--For you.....). I'll scan it; just email me for an e-copy. Included are such easy-to-miss items as ''Contractor has provided countertop care instructions'' and ''All light fixtures have working bulbs in them.'' Perhaps most important in Piedmont is ''inspections completed and permit finaled?''

By the way, one of the most satisfying hours I've had in years (what does that mean about me?) was when I picked up adhesive silicon and felt ''buttons'' at the hardware store and walked around the house installing them everywhere a cabinet or window seat lid bumped up against a wall, or a shower door could hit a door jamb, or the microwave door intersected with a shelf edge. It's those final little touches that make all the difference.

At What Price?

So I just said, “homes that sell, sell promptly, while those that aren’t meeting serious buyer interest just sit.” How do you make sure your home is priced in a manner that attracts buyer interest?

Careful and thoughtful positioning in the market is key! I work hard to ensure that we get it right on two fronts: price, and positioning compared to the real competition.


We need to get the price right. Let’s talk about “last listing price” vs. “original listing price” focusing on Oakland’s 94611 zip code for a moment: 64 homes sold in Montclair during the third quarter. The average ratio of sales price to original asking price among the homes that found a serious buyer was 97%. About a third of these sold promptly for over the asking price, while the balance sold for as little as 70% of the original asking price, usually after one or more interim price reductions and quite a bit of anxiety-producing time on the market.

Today, 138 homes are on the market in Oakland 94611, and most of these were on the market when the 64 homes above went into contract. (The average days on market for those that did not attract a real buyer is 72 days; twice as long as those that met market expectations.)

Serious buyers were purchasing other homes, and leaving these to sit. In many cases, the sellers of these homes can’t sell for much lower--in fact 49 of the 138 are either bank-owned (in which case the owner presumably couldn’t find a buyer so the bank foreclosed) or short-sale distress situations.

And it’s a mistake to think “well, 64 homes out of roughly 200 sold this quarter, so if I just leave my home on the market for 3 quarters, it too will sell. I’m willing to wait to get the price I want.” If only that were how it works! During those 270 days, dozens of new listings will hit the market, and the real buyers will continue to buy the pick of the litter, and leave the rest to sit. In fact 183 homes--that is, 183 hopeful but unrealistic sellers--have come off the market since the beginning of the year in Montclair (admittedly some came back on and their homes finally sold).

Homes are definitely selling in our neighborhoods, but only serious sellers who are willing to meet the market are successful; serious buyers are not wasting time with sellers who want or need more than the market is willing to pay (to say nothing of those pesky appraisers, who need to see value before they’ll give the thumbs up for the buyers’ loan).

Positioning for the Real Competition

Sellers in our market need to know what their real competition is. A nicely located home in central Piedmont is competing against other homes of similar size, condition, and location in Piedmont. But serious buyers looking at it are also looking to other communities with good public schools--most typically Lamorinda and Marin County.

Just last week I received a call from a buyer with an interest in Piedmont, who respectfully wanted to make sure I knew that they were also looking in Mill Valley. Buyers from earlier in the year found they could meet their schooling needs best by focusing on renting in Lafayette. It’s true that particularly at the higher end, many of our buyers are cross-town move-up buyers. But you need a good sense of the market in communities your buyers consider interchangeable (even though we, together with San Francisco magazine, know Piedmont is the place to settle down with its short commute to the financial district, better schools (Gold vs. Silver according to US News), greater diversity, and higher incomes and education levels than these competing communities).

Did you know that Piedmont is within biking distance (2 miles) of seven of the Chronicle’s Top 100 restaurants in the entire five-county Bay Area while all of Lamorinda has only three restaurants on the list? Or that Yelp says there are 53 burrito outlets within 2 miles of Piedmont while Orinda has four? I know these factoids as well as other objective demographic data because they are in my “Comparing Piedmont to Lamorinda” factsheet I prepare for buyers trying to get a better handle on their choices.

You want a broker representing you who understands the underlying market dynamics facing your real buyers, and spends the time to make sure interested buyers get the ammunition they need to decide that Piedmont, and your home, is where they will get good value and a great lifestyle.

Prices Firm through Ups and Downs in Broader Market

The third quarter of 2010 in the East Bay saw a continuation of the strong and stable spring market (as agreements struck in the spring closed 30-45 days later) in combination with signs of slowing at the end of the quarter.

Across Oakland, 810 homes closed (compared to 1051 in 3Q09 and 961 in 2Q10). The median price for these was $257,000 while the average was substantially higher at $359,000. This differential suggests a large number of homes selling at the lower end of the market, likely distressed properties (in fact, 30 percent of all Oakland sales were for all-cash, and of the all-cash sales, the average price was $276,000). Prices ranged between $2 million and $38,000, with about two dozen selling for over $1 million.

Average “days on market” was a brisk 37 days, (34 days for single family homes excluding condos, etc.). Thirty-three homes sold in 94610 (roughly Crocker Highlands) and 39 in 94611 (roughly Montclair) with roughly the same days on market as the city-wide average, and with sold prices just a tad below the last listing price.

Berkeley, meanwhile, saw 143 sales (compared to 146 in 3Q09 and 177 in 2Q10). Prices ranged between $1.8 million and $220,000 (for a single-family home rather than a condo, by the way), and typical days on market was 27 days. Twenty homes sold for over $1 million, and about 20% of all sales were all-cash.

The California Association of Realtors reports that across California, as of September, that sales (# of purchases) are off 12% and prices are up 4.5% compared to a year ago, while median time on market and inventory levels (and the time it will take to put a home into a new household’s hands) are both up substantially. Also less-than-comforting are the county data: Alameda County saw a 10% drop in median prices from August to September, though a 5% drop in prices since September, 2009. The number of overall sales throughout the county is down by 25% compared to a year ago, though up by nearly 10% between August and September of 2010.

Zeroing in on Piedmont, we saw a total of 39 homes close in the third quarter (compared to 30 in 3Q09, and 37 closings in the second quarter), and they closed after an average 30 days on market. Prices ranged from $593,000 to $2.3 million. The average price was $1.435 million ($508/sf) compared to $1.495 million last quarter, and $1.433 million a year ago. the final sales price was typically about 3% below the original asking price, though that final vs. asking ratio varied from 115% to 80%. Median prices were consistent across the periods and at a somewhat lower number.

Sales seemed to slow quite a bit in the late summer (very few homes went into contract after July 15--usually we see the slowdown kick in a few weeks later) but activity has picked up again since Labor Day.

Thirty homes are currently on the market. When you look only at these homes for which buyers have not yet made a successful offer, the average days on market is 92 days. Two homes have been sitting on the market for about two years, while four are coming up on 6 months to a year on market, which drags up the average--homes that sell, sell promptly, while those that aren’t meeting serious buyer interest sit.

Thirty-four homes have left the market during the entire year, though in a few cases they return to market or have sold privately.

Low interest rates continue to be an extraordinarily significant factor in buttressing the pace of sales--I did a quick exercise last week to compare the ''how much house'' a household with $100,000 in income could purchase at today's low rates compared to 6%, which we were happy to see about 18 months ago. Ignoring things like car payments and student loans, etc., that buyer's monthly take-home pay can accommodate a $600,000 home today following standard underwriting guidelines, but could ''reach'' only to about a $500,000 price point at 6%. The flip side of the equation is that a seller can interest that buyer to pay $600,000 today, but would have to drop the price down to $500,000 to entice that same buyer if rates were at 6% (because the lender would not sign a pre-approval letter for that same buyer in a higher interest rate environment. Of course there will always be buyers able to pay $600,000, but there will be many fewer of them.)

Bottom line--home prices in Piedmont have stayed strong this quarter; saw an early slow down in demand at the end of the summer, but appear to have recovered for a good fall season. One home formally closed in October (reflecting that slow market in the late summer) while nine are currently pending.

Call me if you’d like the detailed Market Metrics report on the Piedmont market over the past two years; I’ve developed reports city-wide, and for the higher-end price band. (You know that when looking at value, you need to consider the price ''band'' or sub-market, in which you sit, right?)