3Q14 Piedmont Real Estate Update---
The third quarter of the year maintained the sales trends from earlier in the year, and represented a big jump up from the third quarter of 2013. The average list price this quarter for the 37 homes closed was $1.858 million, and average sale price was $1.989 million. Before shock sets in, compare that to the median price trends: The median asking price this quarter was $1.495 million, and median sales price was $1.775 million. I rarely include both sets of data, because they so rarely diverge to this extent.
There's a clear reason, however: 3Q13 saw a highest price of $2.93 million--and that was about the max for the previous several years. The very high end of the market had seized up during the crisis. In contrast, in the past year, a large number of high-end homes have come to market and closed (though fully 1/3 of homes currently on the market in Piedmont are priced at over $3.5 million, suggesting buyer demand is not bottomless.)
This quarter we saw not only a highest sale price of $5.45 million in Piedmont (as reported by the MLS...), but there were four sales over 3Q13's max. That is, with actual sales to review and fold into the averages in the over-$3 million range, our average sales prices spike up.
Circling back, these figures represent a 17% increase in prices this quarter compared to 3Q13 on a median basis (which I would focus on), and 34% on an average sales-price basis. Across all sales this quarter, the average sales price was 7% over the asking (the median was 19% over asking). Homes sold in a typical 15 days on the market, and for $670/sf (average $669/sf and median $671/sf). As I pointed out to buyer clients just today, don't consider $670/sf to be what you'd expect to pay for most homes in Piedmont, however. Those homes that punch many buyer buttons--those that are recently renovated in an of-the-moment style (see below for more on that!), include a master bath, have all bedrooms on the same level, include a family room, preferably that kitchen/family room opening onto a large andflat backyard, and a location walkable to both schools and Piedmont Avenue, the prices have consistently been closer to $850/sf or more.
Putting these stats in the context of last quarter's data--the prime sales window in Piedmont--the market has consolidated its gains--buyers are thankful we are at a bit of a plateau rather than still on that steep upward slope: Last quarter, 65 homes sold for a median price of $1.758 million--nearly identical to the median this quarter. The average sale price then was $1.884 million (compared to this quarter's $1.989m).
Pulling back to the regional and statewide data, the Ca. Association of Realtors reports that prices across Alameda County are up 9.2% July over July (on a median sales price basis). Check out a new app that the CAR has introduced if you're interested in looking at pricing trends (and other sales stats) in other counties in CA. Across the state, median prices are up 8.9%, and the total number of sales was down by 9.3% on a year over year (through August) basis. This supply shortage of available homes certainly contributed to price spikes earlier in the year, but it appears that more sellers are motivated to put homes on the market (or are able to sell and not bring money to the table) because we see total inventory is increasing these last few months.
In addition, those Facebook and other IPO beneficiaries who had money burning a hole in their pockets have blown their wad, so the crazy money is not nearly as significant a factor today as it was earlier in the sellling season. (On the other hand, with the exception of one bizarre situation in which I was involved, homes are invariably appraising for the contract sales price--the all-cash and way-over-asking prices from the early- to mid-summer are still considered legitimate comparables today. If you've been postponing a re-fi for some reason, there's no reason to wait, as appraisals will be successful, and interest rates are finally creeping up.)
And finally, at the national level, my contacts at the Institute for Luxury Home Marketing (I won a national marketing award several years ago at this Dallas-based organization's annual conference--the only conference typically on my calendar suggest that high-end properties across the country are seeing some price pressure. Click here for more national stats focused on the high end, generated by the same vendor who provides detailed info on the Piedmont market when I organize open houses for my listings.
Anytime you need more insight into local or regional housing trends, just let meknow. I appreciate the opportunity to review stats and market trends through the quarter--it helps inform my thinking, gives me something to talk to clients about, and certainly ensures that I operate in a data-driven manner, rather than relying on my gut only!