Piedmont real estate was back in the game this quarter, if you can rely on insights from 15 completed sales reported by the Multiple Listing Service. The average price per square foot across all sales, well in the low $500s for the past few years, stood at $614/sf, just a tad higher than the $612/sf we saw during all of 2006. And the sales price averaged $1.576 million, a bit less than the $1.685 million average from 2006 (the two metrics can diverge if, for instance, the average sold home size were larger back then). While about one-third fewer in number than at the top of the market, this quarter's sales cover the waterfront from a low of $635,000 to a high of $3.45 million. The typical home sold for about 10% over the asking price and in 20 days (though if you pull out three sales that took much longer to find a willing buyer, the average drops down to just eight days--only one open house weekend before offers were considered).
Comparing 1Q13 to 1Q12, the difference is striking: Last April I reported an average sales price of $1.275 million on 19 sales, one of which was over $2.5 million. The average price per square foot was $517/sf, even though the houses, in the main, tended to be a bit smaller than this quarter's crop (a small three-bedroom home will typically sell for more on a price-per-square-foot basis than will a roomy three-bedroom home, because both have the same basic functionality (adjusting for condition, etc.)).
Looking at currently pending homes--that is, those that went into contract during the quarter but have not yet closed--the trends appear to continue: Excluding one home on the market for nearly six months, the other pending homes in Piedmont sold promptly in an average nine days, suggesting multiple offers and over asking-price sales.
In fact across the East Bay's six cities and since the beginning of the year, homes in which my office was involved (on the buyer or seller side) sold for an average 13% over the asking price, in an average 13 days. Twenty percent of the transactions sold for all-cash. (I'd love to say that Pacific Union's stellar market acumen accounts for those stats, and we certainly have been representing a disproportionate number of successful buyers this quarter, but I presume that each of the East Bay's major offices are seeing similar results.)
Clearly low interest rates and a broadening sense that the crash has passed are bringing buyers into the market <I>en masse.</I> Other neighborhoods are seeing this same strength, including Glenview, Crocker Highlands, El Cerrito, Kensington and Berkeley. Montclair and Piedmont Avenue, together with the condo market and homes south of Fruitvale Avenue have not made up their losses, in part because of the low down payments that predominated in those neighborhoods at the top of the market, and the correspondingly large proportion of homes that remain “under water.”
So sellers: Now may be an excellent time to put your home on the market. It appears that, except perhaps at the highest end, Piedmont homes have regained their pre-crash value. When interest rates begin their climb, and at some point they will climb, prices will inevitably see downward pressure (as higher interest rates bring higher and marginally less affordable mortgage payments). The question is whether pent up demand from the no-longer-underwater folks and from new entrants into the housing market will keep demand strong enough in the face of higher monthly costs to keep prices stable.
Buyers: Link up with a local agent and be prepared to move fast, and with confidence. In this market, sellers and sellers' agents will go with the offer that appears most buttoned up and from professionals they trust, even if it's not the absolute highest. (I heard this week about an offer that was out of the ballpark, but from buyers who had not even been in the house and clearly had not processed the typically voluminous disclosure package--a great offer is not a great offer if it won't close.)
A look at other local markets:
Across all of Oakland, the average sales price increased between 1Q12 and 1Q13 from $301,000 to $320,000, an increase of nearly 7%, though still well below the 2006 average of $515,000. Crocker Highlands (94610 single family homes) saw sales price increases of 28% from 1Q12 to 1Q13, from $647,000 to $832,000 (which in turn was an average 8% over the asking price this quarter).
For more details about other areas in the East Bay, and in the Bay Area more broadly, see Pacific Union's report.
By the way, the PacUnion blog is a great resource. And while I'm at it, here is the link to the Christie's magazine this month, including stories on polo, Ottawa, and living near a national park, among others.
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