After a few quarters of rapid price increases in Piedmont, we saw an appropriate pause this last quarter--the average home sold for $1.486 million in the 3rd quarter (compared to $1.647 million last quarter and $1.66 million a year ago--the median was quite stable compared to 2Q13). The average price per square foot was $574 (compared to $630ish/sf over the last few quarters). Thirty-four homes sold in an average 19 days on the market--still very high market velocity. The average sales price was 4% over the average asking price.
Homes sold all along the price spectrum--from $675k to $2.93 m. But several homes priced above the $2.5 million range have languished, or left the market, suggesting real resistance at those high-altitude price levels. Three homes (as reported by the MLS) have sold above $3 million since the beginning of the year, all larger than about 6,000 sf, and all at $650/sf and below.
As noted last time, increasing interest rates in the late spring have certainly exerted a bit of downward price pressure. Buyers qualify based on the mortgage payment-to-income ratio, and those mortgage payments now buy less house than they used to. A couple with $200,000 in downpayment could afford a house worth $1 million at the beginning of the year, but they can afford only a $870,000 house today, if everything except interest rates stays the same. That's a 13% price drop right there if the seller were to ''bear'' the entire effect of the rate change. And we haven't seen price drops of that caliber by any means.
Berkeley has seen very stable prices--the average home sold for $852k (compared to $851k in 2Q13), in about 20 days. Sales prices were about 12 percent above the asking price, as they were in the ''hot'' spring market. Median prices were likewise very consistent over the period as was the number of homes sold.
Oakland saw slow continuing improvement between the spring and summer quarters--the average sales price was up about 2.5%, from $515k to $527k, about 8% over the asking price. The 94610,11, and 18 zip codes surrounding Piedmont, saw even stronger recoveries: Together, their average prices were up by 6% compared to last quarter, and the average sales price was 10% over asking. Homes consistently sold in about 20 days, on average, across all of Oakland and in our surrounding areas.
We've talked in the past about how the data would have been skewed by underwater but financially strong owners staying out of the market--if only households more on the edge were forced into selling in the down market, then the average price would reflect their lower price points. Likewise, we're not clear how these data today are affected by a disproportionate flood of higher income/higher home-price sellers moving into the market.