Monday, July 16, 2012

Piedmont Prices not Just Firm; They Rise!

The Piedmont market continues to surge in the 2Q12, despite unsettling news from Europe. Forty-four homes sold in Piedmont between 4/1 and 6/30, ranging in price from $650,000 to $2.6 million. (Sales above $2.5 million have been fewer and far between--they typically involve move-up buyers from within Piedmont or perhaps San Francisco, and while a household very well might have more income and purchasing power today than a decade ago, they don't likely have the remarkable appreciation that buttressed high home prices five years ago.) The average price per square foot this quarter was $555, compared to $494/sf in 2Q11, a 10% rise. The pace of sales this 2Q is about the same as last year: Forty-four homes sold, compared to 42 in last year's second quarter. Thus, unlike other parts of the Bay Area, inventory (available homes) is roughly comparable this year compared to last--the strengthening of the market is not due to just a paucity of available homes. In addition to price improvements and rock-bottom interest rates (which increase buying power), the velocity of sales has improved. The homes that do come to market are selling very promptly--typically in an average of just 13 days (two or fewer weekends of open houses)--and for about 7% over asking compared to 2.4% over asking last spring (and 2% under the asking price in 1Q11). Both the days-on-market figure and the ratio of asking-to-sales-price suggest that most of our sales involve multiple bidders, and given our tendency to give detailed disclosures to buyers in advance of offers, they often are contingency-free. The average price of a home is $1.337 million this quarter, compared to $1.275 million last quarter and $1.539 million in 2Q11 (when three homes over $2.5 million sold, dragging up the average). In fact if a home on Sea View and another on Glen Alpine had been included in the MLS-derived figures, our average home price would be over that of a year ago.

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