Wednesday, July 20, 2016

2Q16 Piedmont Update

The Piedmont Market

The second quarter of 2016 consolidated gains made over the last couple of years in Piedmont. Low inventory and low interest rates kept prices up. About a quarter fewer homes sold this quarter (36 vs. 46 in 2Q15), with prices stable at right about $2.2 million, in the main.

The mix of homes is slightly smaller or more upscale this year compared to last--both factors lead to higher prices per square foot, even though the overall sales prices were relatively constant. While the average last spring was $755/sf, this year the $/sf increased a bit to $790. My sense is that offering prices stayed relatively consistent this year to last, in part to encourage auction-like behavior where that was possible. While sold prices were about the same, they were about 15% over asking this 2Q16 while only 9 or 10% over asking last year. 

 Homes sold in a brisk 12 days on average, and there were very strong sales all along the price spectrum--from the lower end up to the four over-$3 million sales reported to the MLS. Nearly all of our sales were in multiple offers.

Solid news for homeowners does not mean great news for the City, however. Because so many fewer homes were sold this quarter compared to 2Q15, transfer tax revenues are down by nearly 30%, again based on properties reported on the MLS.

Similar consolidating trends describe the surrounding neighborhoods of Oakland-94610, 94611, and 94618. The average single family home sold for roughly $1.2 million both this spring and last, in 14 days, at 18% over the asking price. In close-in Oakland as well as Berkeley, however, the total number of homes sold was very stable year over year, in contrast to the decline in available homes in Piedmont.  That's good news for those thinking about a move to Oakland.  Today's staff meeting included a report that the absorption rate (ratio of homes hitting the market compared to those going into contract) remains super-low in Berkeley, but is appreciably higher (though still a seller's market) in Oakland. And total inventory in the Oakland-Berkeley-Piedmont area is up to the highest level this year as we swing through the July 4th pause.

Berkeley is seeing sizeable price increases this quarter compared to 2Q15--average prices rose from about $1.1 million to about $1.25 million, a 13% jump.  Several of my clients have been in that mixing bowl this spring, and it is not fun. Homes are selling for 25% over asking, on average, in 14 days, at about $720/sf. In fact I've mentioned to several clients that in the $1-1.5 million range, prices are essentially the same in Piedmont and Berkeley right now, given the upward trends there. Across Alameda County, prices were up 9% this May compared to last, per the CA Assoc of Realtors.

We have been hearing about a cooling housing market in San Francisco for a couple of months (see this analysis from my colleague Deborah Lopez at Paragon in the City), and many of us in the business are wondering if some of "our" San Francisco buyers are now able to stay there rather than cross the bridge. And yesterday I even wondered if, in the depths of the Great Recession, families postponed childbearing a bit, just in case, which would lead to a few fewer 5-year olds looking for great kindergartens about now! And a quick Google search confirmed the theory.

Speaking of colleagues, Dawn Thomas down in Silicon Valley reports a similar softening in her market. Across the state, home prices were up 5.1% in April 2016 compared to 4/15, though prices statewide are still well below the peak of May, 2007. The international buyer, who represented up to 10% of total statewide home sales in the past several years, has declined to less than 4% of the market. And as I say regularly, remember that these folks are not just the stereotypical Chinese and Russian buyers, but the UC professor from Latin America, or the high tech worker with UK citizenship.

The California Association of Realtors points to 6 factors contributing to the shortage of inventory in the state:

--Low interest rates on current mortgage (leading owners to "stick" in place)
--Low tax bill in current home (ditto)
--Fear of the capital gains hit in communities like Piedmont (with extra-long "tenure," high initial prices and high appreciation, we are more likely to bust through the $500,000 capital gains exclusion for homeowners)
--Tougher mortgage requirements today
--Slow new-home construction, and
--Perception of few move-to options.

In fact, California homeowners are moving after 10 years now, compared to 5-8 years before the crisis. Think for a moment about the multiplier effect of just one homeowner staying in place for one extra year.

Layering over all of these housing elements is the overall job market. Between 2012 and 2015, the Bay Area saw 235,000 new jobs, but only 30,000 additional housing units built (and many of those are not near where the jobs were created). No wonder our commutes are getting longer! We'll see how long it takes for the market to get to stability--something we really haven't known for 15 years. But meanwhile, give me a call and we can talk about your situation!

Speaking of Giving Me a Call....

I've recently talked to heirs of a client about market dynamics and the sell vs. rent choice, a downtown Piedmont homeowner about various "move down" scenarios and implications, a longtime homeowner about thoughtful renovation choices for now that will make sense whenever she sells, and a local real estate investor about potential returns on several local possibilities. I help people make great real estate decisions, and I get paid when you or friends and family use me to buy or sell a home.

Still haven't gotten around to a Re-Fi?

I have two buyers in contract right now, and both will be getting financing in the 3.6% range. Rates are extraordinarily low, and there is so much re-fi activity that the appraisers are overwhelmed (my big issue this morning). If you haven't refinanced recently, email me for a list of my five most reliable lenders. And if you're only 10 years away from paying off the mortgage, know that lenders can organize a new 10- (or 15-) year loan at today's low rates. No reason to pay 5% or more, just to avoid another 30-year mortgage--put those savings into your pocket, not the bank's!

The Christie's Magazine

For all you shelter magazine readers looking for a free fix--The Outdoor Issuemade me feel like I was at the Post Ranch Inn, in my living room!
Garden Ideas!

A client works for the East Bay Park District's Botanical Garden up near Tilden. If you haven't taken a morning walk up there (no dogs, unfortunately for us), you are missing out. The website says that penstemons and red mimulus (sticky monkey flower) are out in force this month. I'm always blown away by what I see up there.

I've been hard at work these last few weeks on the garden in Inverness--propagating and transplanting from Piedmont to West Marin, and setting aside bearded and Douglas iris bulbs for the Inverness Fair in August.  Let me know if you'd like a few yellow Douglas (PCH) bulbs, or frilly white or simple light purple bearded iris bulbs later in the summer.

And of course, following a 15-year old tradition instigated by Judy Rosenberg, I'm making NYT Plum Tortes for the fair and freezer, with the gargantuan crop of wild plums this year. In fact last weekend we hosted the Spouse's annual old-time string band extravaganza, and dessert was fruit crisp, with rhubarb, plums, blueberries, apples, huckleberries and blackberries from the yard. Luscious with the youngest Son's homemade ice cream!

The Race of Things

See two recent NYT stories here and here that really reinforce the notion that a key driver of longstanding inappropriate police killings of African Americans (only now caught on tape) is the broader role of race in American society. Today's story, based on the Home Mortgage Disclosure Act data I spent much of my previous professional life working on, outlines the continuing role race plays in where we live, even as we approach the 50th anniversary of the Fair Housing Act. 

Did you know that during the depths of the Great Recession, lenders sent out word that they would not lend in certain zip codes (including our neighboring Oakland 94610, 94611, and 94618) without disproportionate downpayments? What impact do you think that had on family wealth, rates of foreclosure, and neighborhood strength?  "You can buy in Piedmont with 20% down, but you need 40% down to move to Montclair or the Glenview."

I can only hope that as we pull apart these issues this summer and really start to talk about race discrimination and its effects on all of us, we'll get to a more real place in this country and will be stronger and more unified for it.  Ann Coulter's comments today, to the CA delegation no less, are not a step in the right direction ("Ann Coulter warns California Republicans the nation could turn into California"-- LA Times).

Pension or No Pension? On-Market Sale or Off-Market Sale?

Pension or No Pension?

I had a nice cup of iced tea with a local lender this morning--he's one of my "Five Great Lenders to Meet your Needs"--let me know if you need the contact list. We were talking about how "stuck" the market is today: Higher-end sellers aren't moving as frequently as in the past, so mid-range buyers don't have anything to buy, and so on down the line to entry-level buyers. Moreover the lack of upper-end sales is leading to the supply shortage that is driving up prices, adding to affordability problems. (Full disclosure--agents and others associated with the business are suffering as well, as we tour available homes, read all those detailed disclosure packages, attend pre-inspections, and make offers--yet our clients don't get the house--until they finally do. Remember, we only get paid when the transaction closes!)

Anyway, he saw a split in financial picture between older Baby Boomers who more frequently have pensions (and who can typically afford to stay in the Big House) and those without pensions (who too frequently really can't afford to stay in the Big House, but often want to). Sometimes there's ego associated with staying in the Big House. We wondered whether "moving down" is a pivotal move that makes the aging process real--once one "moves down," do we acknowledge in some ways--or not--that we're on the back side of a career?

 Maybe two-income households--or two-IRA households--can better afford to stay in the Big House than their earlier cohort could, so of course the pipeline would naturally slow. 

Moving can be intimidating, time-consuming and emotion-laden of course. "Change sucks" I used to say when heading a federal agency through some radical change back in the Reinventing Government '90s. I get it. 

 And for many, it's so much easier to just stay in place, paying the same mortgage you've had for years, even if it might be more logical to switch to a cheaper mortgage and invest the difference. Inertia is so hard to resist, say the physicists.

Some might think the funds are best "invested" in the house, but remember that the average $/sf in Piedmont over the past 10 years has gone from $600/sf, to $750/sf during the end of last year/beginning of this year and to $685/sf looking only at YTD 2016. That's only about 15-25% appreciation
over ten years-about what finance folks say to expect from real estate over time.

If moving on is what you want to do, but moving seems like more than you can handle, remember that your agent can handle lots of the details. Especially if you buy the move-to house before selling (typically getting a home equity line on the current house to help fund your purchase), it's easy to prep an empty house for sale.
We do it all the time.  While there was no renovation involved in my recent sale of 217 Bonita, Teresa Baum and I arranged to move 60 years of household goods, paint, replace some fixtures, and prep the yard; we were on the market in 27 days. 

If you haven't yet bought the move-to home, so sorting, donating, and gifting items and renovating a bath or two is part of your process, we can arrange for a professional organizer and contractor to help you do it efficiently, and on your schedule. And your lender can walk you through how to get from here to there in a way that reduces risk and perhaps decreases your overall interest payments [still paying on your student's college loans?]. Let me know how I can help!

A "Bonita" Sale


Speaking of 217 Bonita Avenue, it sold way over asking with eleven offers in 12 days, and will close in about three weeks from first hitting the market. Admittedly, this 1907 house is perfectly located for today's drop-off-the-kids/walk-to-latte/catch-casual-carpool buyers. It's perfectly sited on a big deep lot with nice Bay views, and offers fabulous architectural details. But then there's the thoughtful and creative advice that my client is paying just the going-rate for:   We carefully timed the offering to coincide with the annual CSL Heart of the Home tour (about 100 of our 350 visitors came during those tour hours), and offered the insights of an architect and contractor during the Saturday afternoon Renovator's Open House. We also strategically advised the seller regarding which prep items would lead to more offers and a higher net price, and which prep items would just chew up valuable time and not add to the bottom line. 

"Bonita" Avenue speaks to the new owners--they are from Chile!  

(And they have no idea I'm a member of the National Association of Hispanic Real Estate Professionals [NAHREP] and have NAR At-Home-with-Diversity training.  Based on open house chats and names alone, eight of our 11 fabulous potential buyers do not look like my own white-dad-mom-and-three-boys family (actually, my mother was born and raised in Argentina, but how could you tell, and, anyway, why?))

So Who's Selling Piedmont, Anyway?

As you know, I've been in DC a good amount of the past year or so, but I'm back full-time now.  Pacific Union colleague Teresa Baum and I have been working together to cover my clients. Looking at the sales so far this year (as reported by the MLS), and understanding that the 23 sales have 46 "sides," we find that:

--32 different agents or brokers (yes, there is a difference....) were involved in the 23 sales.
--13 different brokerages were involved in the 23 sales.
--In just two cases, one agent represented both the buyer and seller; one of these in an off-market situation (later reported in the MLS).
--Firms were evenly spread across the price spectrum--no firm "owns" the upper or lower end.
--In about half of the transactions, buyer and seller agents were from different firms (meaning that it's not particularly common that buyer and seller are both represented by the same firm).
--Only once in 23 sales was the brokerage fee 6%.

Bottom line: Buyers and sellers entrust their assets to lots of brokerages and lots of agents in Piedmont. As always, you should interview three agents and decide whose style and approach best matches your needs.

The Christie's Magazine--

Is available here.  Be prepared to wait a bit while it uploads.

On- or Off-Market?

As noted, these sales are only those that hit the MLS. Others have sold off-market and were never reported to the MLS. What's up with that? 

 With so much competition, too many buyers are missing out on a purchase over and over again. They are anxious to hear about off-market listings, because they hope to avoid competition and higher prices. (Now, really, how is that good for a seller?)

Some sellers think that selling off-market is the new new thing, which it might be, but it's typically not the way to get the highest and best price for a home. (Let's say right now that some sellers aren't interested in highest and best price--they'd rather protect their privacy, or sell super-quickly, and they are prepared to leave money on the table to do so. I respect that, and always ask about my clients' goal first.  They are the principal; I am just the agent.)

For those who want highest and best price (say, those of us who don't have a pension), why is an off-market sale not a great idea? I'd say there are four basic arguments:

--In a rising market, as we have now, an off-market price is based not on what today's buyers are willing to pay, but what a few buyers a couple of months ago were willing to pay.

--In today's market, we often see those way-over-asking-prices when a half dozen or so buyers are bidding, and one party digs deep and offers substantially more than the competition (who are all focused on what some buyers a couple of months ago were willing to pay). If you want a chance of a way-over-asking price, you need to go on the MLS, priced for multiple offers.

--Off-market buyers think they are doing the seller a favor, and off-market sellers think they are doing the buyer a favor. Once in escrow, they both get cranky and feel used, and try to adjust their side of the bargain downward or upward. And,

--Off-market buyers have no "Buyer B" nipping at their heels, ready to step in if "Buyer A" wants to reduce the price, or get all the furniture for free, or have you replace the roof. On the MLS, buyers who are in contract are generally well-behaved, and follow the terms of the contract, because they fear that the seller might ditch them and go to Buyer B.

And there's basically one benefit to an off-market sale:

The agent who orchestrates an off-market sale typically spends a lot less time on the effort. They might even broker both ends of the deal (and what happens when one party wants to cancel--I do not want to even go there on fiduciary duty....). Two clients in one transaction is much better financially than a one-purchase-in-three-or-four-attempts, and just might be attractive enough to lead an agent to throw your interests overboard.

Which gets us back to the beginning--if you're thinking through the next 15 years and trying to optimize your retirement prospects, now might be a fabulous time to get the highest and best price for your current home, and then a new home here or elsewhere (I can track down a great agent there) for all-cash, or at super-low interest rates. Give me a call to discuss your situation--

After all, I help buyers and sellers make great real estate decisions.

The Perfect Piedmont Brown Shingle--On the Market

The Perfect Piedmont Brown Shingle-- 

You know, I'm actually famous for doing two things (actually three things), and I'm doing them both this weekend at 217 Bonita Ave.  

The Chron did a story way back in 2007 on my innovative Renovator's Open House at 25 Mesa Ave.  An architect and contractor spent Saturday afternoon at the ready-for-renovation house fielding questions about options and opportunities, and talking about what they do.  Nothing like a renovator's open house to draw renovation-ready buyers in a targeted-like-a-laser fashion.
And then about 6 years ago, I started bringing central Piedmont homes to market during the Children's Support League Heart of the Home Tour.   If all those well-connected folks are coming through downtown, won't they make a slight detour to look at a house on the market? And then won't they do targeted word-of-mouth marketing on my clients' behalf while out and about that weekend?  So here we are, and I'm spending sixteen hours at the house this weekend!  

217 Bonita Avenue in Central Piedmont is fabulous, and on the market at $1.75 million.  
Teresa Baum and I were open today, and will be open Saturday 10-5 (from 2-5 pm visit with local architect Carolyn Van Lang and master builder Nick Ozier who will be at the house to discuss your ideas and plans), and Sunday 2-5 pm.

Built at Piedmont's Founding 

Filled with graceful proportions, classic details and great East Bay light, this central Piedmont "centennial" home was handcrafted in 1907. Invite guests into the foyer and through grand pocket doors into the dining room. The spacious living room overlooks the nearly 8000 square foot lot, with its long sight lines and central brick patio perfect for entertaining. Upstairs find three large bedrooms with coved ceilings--the large master suite includes a wonderful fireplace, two large closets, enclosed porch as well as Bay views. Downstairs is a rumpus room with walk-out access to the yard. There's plenty of storage in the lower level, and in the large redwood-timbered detached garage. 

 The Perfect Piedmont Location 

 Situated on one of Piedmont's best streets, the home is just a couple of blocks from recently rebuilt Havens Elementary (and its Schoolmates before- and after-school care), the middle and high schools, casual carpool to San Francisco, fast bus service to downtown Oakland or BART, and Mulberry Market at the center of town. Tot-friendly Dracena and Piedmont Parks are very closeby, as is the Mediterranean-style community center and Bushy Dell Canyon (off-leash for dogs). With plenty of staffed cross walks and child-friendly drivers, playdates and games of catch or Frisbee are easy to organize.


 Owned by the same family for nearly 60 years, 217 Bonita is ready for a refresh--and attractively priced! Put your own stamp on the home and grounds for the coming decades, all at once or over time. The pest bill is a measly $730.  The roof was recently replaced and seismic upgrades completed.  

So swing by sometime, and do your part for the campaign and talk it up to someone who should know over the weekend.  And see the lots of photos and more info.

The Market--

What to say?  I've already explained the why of our current market--all those well-heeled tech workers for whom Piedmont is now a very convenient bedroom community, plus low low interest rates (if you're planning a once-in-30-year purchase, how could buying at today's rates not be a good idea?), and a radically constrained supply.  But what's the what?

Hard to say, given that only 8 homes traded in 1Q16--1 in January and 7 in March.  The average $/sf is still in the $740-50/sf range, but that means nothing with such a small sample size.  The median days on market is 10.  The ratio of asking price to sales price is about 112%--but one home sold for 41% over asking.  How do we counsel our buyers?  

[By the way, 12 homes have sold thus far in April, with roughly the same ratio of asking to sales price, and median days on market.  But the price per square foot shot up to $800/sf, pulled up by two high-end homes that traded at over $1000/sf.  Remember--small n, and few conclusions can be drawn.]

And all the surrounding neighborhoods are seeing the same upward pressure.

Any interest in selling and helping to ease supply problems?  We're typically lucky enough to have a good amount of equity in our homes at this stage of life, so you might consider buying your "go-to" home now, potentially with a home equity loan on your current house, and then circling back to close your position later in the summer or fall.  I've got lots of info on the state props which allow you to take your tax bill to a new home once you hit 55.  And don't forget the federal capital gains exclusion.

We may not see prices like these for another decade!

4Q15 Piedmont Update

Happy New Year!

For those of you who receive my annual calendar mailing, this will be an update of what you already know--the Piedmont market popped this year!  After cleaning up the MLS data a bit, we're left with 115 sales (230 "sides")  selling at an average $2.122 million ($2 million median) or an average $747/square foot.  The typical home sold in 13 days (two weekends of open houses) and at about 11% over the asking price. 

In 2014, we saw a quarter more homes sell, but sales prices were a bit lower--an average of $1.922 million (median $1.75 million).  Homes then sold in about 13 days, and for about 9% over the asking price.  Thus, 2015's listings sold for about 12% more than did 2014's offerings (15% more on a price/sf basis, and 10% more on a gross sales price basis).  

Remember that at the top of the last price peak, homes in Piedmont were selling for $605/sf, so we have far surpassed those heights in the intervening 10 years (while so much more of the country has not).  Despite this year's higher prices, the lower number of sales means that the net basis for our transfer tax actually declined by about $25 million, meaning about $325,000 less in transfer tax revenue for the city's budget this year than last.  

I spent quite a bit of time dealing with family issues on the East Coast this year, but the nine transactions I was involved with compare very nicely to these stats.  My four sellers garnered 22% over their asking prices, while my five buyers purchased for an average 3% over the asking price.  I keep my eyes open for very good values, and dig deep into the DNA of my listings to draw out (and draw attention to) details that add real value for buyers.  None of this "lush garden, bright kitchen and family room" stuff.

The entire East Bay saw significant appreciation. 
 The areas of Oakland that share our zip codes saw average single-family home prices of $1.147 million in 2015 (an 11% rise from 2014's sales, though interestingly, almost identical numbers of sales).  Oakland S-F homes as a whole averaged $698k, a nearly 17% increase over 2014, when just a few more homes sold in just a few days more, on average. 

Berkeley tracked the trend as well--about 10% fewer homes sold in '15 compared to '14, but at about a 13% increase, to $1.15 million, on average.  Click here for details on markets in other East Bay locations, across the region, and in Tahoe (where Pacific Union opened offices last year!).

The California Association of Realtors does a great job of reporting on housing trends.  I often pass Leslie Appleton's analyses onto my clients.  See this for example.  The Association reported recently that through 11/15, single-family home prices were up 6.8% statewide, condos were up 7.6%, and metro LA was up 5.8%.  But at what "price"? 

There was a dramatic but transitory downward dive in the number of home sales closed in November compared to October.  This I'm sure was due to the new mortgage regs from the Consumer Financial Protection Board (see below), which went into effect in October.  But the Housing Affordability Index tells a more nuanced story.  At the top of the market in 2005-6, only about 13% of Alameda County residents could afford to buy the average home, given their incomes.  At the bottom of the market in late 2011, as many as 45% of County residents could.  We are back down in the 18-20% affordability range now. 

First-time homebuyers are similarly stressed, both by mounting education loans on their balance sheets, and by stagnant wages.  CAR tracks the rate at which the typical first-time homebuyer can afford an "entry-level" home in the market, and the index has gone from 65% at the bottom of the market, down to under 40% now.  Since the index focuses only on income and home price, and not on W2 vs. 1099 income, not on whether the buyer has been at his/her job for at least two years, and not on net worth or debt load, it's easy to see how many of these buyers might look good on paper, so to speak, but not be able to actually qualify for a mortgage under current requirements.

All these pressures are at play in the East Bay--historically low interest rates, strong economy, relatively fewer homes to choose from, not much new construction coming out of the pipeline yet--but in addition, we all have an additional upward pressure, which Piedmont has in spades.  We never were a "bedroom community" to Silicon Valley.  But we definitely are to Twitter and Google offices in San Francisco, and to Uber and Pandora just a roll down the hill in Oakland.  I think these young, diverse executives find that Piedmont is exactly what they are looking for--a close-knit community that offers a very short commute and great after school care (particularly for two working spouses), one set in a quasi-urban area that's among the most diverse in the country, and one that reflects the high incomes and education levels that they already have. 

I can't tell you how many of my many many non-white and GLBT clients say they really feel at home in the East Bay rather than in Lamorinda or Marin (and I reinforce the point with my Comparing Piedmont to Lamorinda and Comparing Piedmont to Mill Valley factsheets, which even track the number of burrito joints within 4 miles of the center of towns!).  By the way, I'm one of the very few of the hundred or so realtors working in Piedmont who has completed NAR's At Home with Diversity training.

A 1-Bedroom Rental in Piedmont Available next Tuesday!
 Set within this classic Piedmont home adjacent to Dracena Park's redwoods, this 750-sf legal 1 bedroom/1 bath unit offers privacy and quiet.  The famous East Bay light pours into the living room, bedroom, and dining room/office.  The kitchen and bath are both updated, the kitchen with gas range, new cabinets, dishwasher, and instant hot water.  Access to large exterior patio, washer, dryer, additional freezer space and a sauna that's perfect after long bike rides or hikes in the East Bay hills and parks.

Enjoy access to Piedmont's excellent public schools, it-takes-a-village feel, local fire and rescue services, and community pool.  Easy commutes via Rts. 13, 580, and 24, and easy access to SFO and OAK.  $2500/month, most utilities included. email me for more info!

Living Here is Good for your Health

The Spouse got me a Fitbit for Christmas, and it has definitely cajoled me into going for that late night walk around the neighborhood to get my final 1800 steps in for the day.  We're so lucky to live in a place that has great weather so much of the time, great outdoor spaces, and friends and colleagues who enjoy getting out with us. 

In fact Oakland was just rated #7 in the country by SmartAssets for outdoor enthusiasts.  Read more about our virtues here.
 And then go take a hike!  
Why Is my Mortgage Approval Taking So Long?

The rules have changed, whether you're buying a home or doing a refi (and if you haven't, but can, do it now!  email me for a list of my five "get it done" lenders).  The Consumer Financial Protection Bureau has now consolidated several closing disclosures and documents into two clean and clear docs, one of which should go to you with key terms shortly after you get into contract, and the other should go to you with key terms a few days before you're asked to sign your loan documents. 

My assessment is that if successful, these new regs will force the mortgage industry kicking and screaming away from it's just-in-time roots to something more appropriate and responsible.  Away from a world of constant drama and "but we need to remove our loan contingency in two hours, and you've known that for three weeks, and we've talked to each of the last three days, and this is the first time you mention your staffer is on vacation and you didn't think to solve it???" calls, and loan documents that finally finally finally show up in the buyer's email 20 minutes before the signing, and then are 1/3% off on the loan's interest rate (yes, that happened to a $4 million+ buyer of mine this year, and the lender was Morgan Stanley....).

We all should get key information three business days in advance so we can check it and confirm it's the same as we agreed at the beginning of the process. Maybe the threat of the mandated three-day fix-it period will convince lenders to get it right the first time, but I'm not sure!

Drought or no Drought?
As I write this, the second of three storms has blown through, scrubbing the air brilliantly clean in its wake.  My hike this morning at Sibley was glorious.  The cows were munching on green grass that wasn't evident just a few short weeks and months ago.

Yet my drive last week past the Nicasio Reservoir suggested that water levels aren't really all that much better yet.   Nevertheless, I was out in the rain earlier in the week ear-to-the-downspouts checking to make sure I could hear running water, checking our water collection gravel pits, checking the sump pumps were working (and, during an episode of The Man in the High Castle, even changing the furnace filter!).

Here's a nice checklist for today's weather, and I hear great things about Water Sprouts if a gray water system is in your future!

Read the Newest Christie's Magazine

Click here for the juicy stuff in the Architecture and Design Issue...... 

China, the Market, and the Virtual Food Drive

PacUnion and the China Market-- 

The spouse and I were hiking in Japan last month, so I was reading the Asian Wall Street Journal.  Was pleased to see that Pacific Union is the only real estate firm in the world (yes, you read that right) that advertises in that edition on its own (rather than through a network of many regional firms under an American umbrella like Luxury Homes, Luxury Portfolio, etc.).  While other Bay Area firms might advertise there along with homes from Connecticut, Hawaii, and Colorado, our full-page ad covered only homes in the Bay Area, all listed by Pacific Union.

It's part of our CEO's push to make Pacific Union the go-to locus for Chinese buyers interested in real estate here.  See this front page story from last Sunday's Chronicle that supplies context and stories.  As the Chinese economy continues to slow (and investigations ramp up), we may see more of these buyers looking for a haven.

Several of my listings in the past year or so have garnered strong all-cash offers from mainland Chinese buyers, and I've advertised some of my more contemporary turn-key listings in the Journal to good effect.  For those Mandarin readers, here's our site--

The Market--

Today's staff meeting suggested that the local real estate market continues its strong upward push.  The combination of 30% fewer listings than last year, yet strong buyer demand, means that our "absorption rate" is at the lowest point in two years--that is, there are way too many buyers chasing way too few listings, and homes are going off the market with great velocity.  
Slightly fewer homes sold in multiple offers this November compared to last (72% vs. 75%) but otherwise, all signals are positive, and loan rates remain at rock-bottom levels (under 3% for a 5-year adjustable loan).  

Alameda County Food Bank Gets Matching Funds TODAY

Planning a donation to the food bank?  Do it today and Royal Coffee in Emeryville will match your donation!  Click here to choose the organization you'd like to donate through (top right under Start Shopping, Select Your Group).  Two great choices are Pacific Union (we're more than halfway to our goal already) and the Piedmont BSA (Boy Scouts).  Cash donations stretch much further than canned goods (as the food bank can tap into deep vendor discounts that we can't), though if you missed the canned good pickup last month, the Boy Scout office still has its barrel ready for your cans just outside the door at 10 Highland Way.

Enjoy the Holidays!

Piedmont Real Estate Update--3Q14

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 and flat backyard, and a location walkable to both schools and Piedmont Avenue, then 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).

Click here for the full data (click to download and then open the Excel file up).  As always, I strip out the house numbers in this spreadsheet: We all need a bit more privacy in this town!

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 me know.  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!
Organizing for a Holiday Event?  I Am----

Today I polled my colleagues for caterer ideas for a holiday event at our house for my spouse's office.  Here are the responses, in no order:

-Lois at Edgeworks,

-Susan Wong, formerly of Lalime's, 510.967.4136

-Blue Heron Catering (510) 533-0781

-Barbara Llewellyn, 510.832.1967,  (looks like she does teambuilding events built around one-day cooking classes too)

And for most creative (and thrifty) idea: 

-Get food from Ann's Catering (of Rick and Ann's) and use Hostess Helpers ( or high schoolers from the Rec Department's database (call 420-3070) to do the actual staffing. 

Finally, the high school's a cappella group will sing for pay (and has a multi-denominational playlist).  If it's of interest, let me know and I'll track down who's in charge this year.

Top Ten in the Country--Two Miles Away

Real estate blog Curbed highlighted the American Planning Association's selection of the Uptown neighborhood of Oakland as one of the top ten neighborhoods in the country.  Read more about it and other coolest neighborhoods here.  Note to calendar:  Add next month's Art Murmur.  See the Art Murmur site for arts listings and First Friday events for next month--

Need a Middleman for a Parent-to-Child Home Loan?

Longtime readers of this blog will remember Circle Lending, which took care of the paperwork for private loans, and Virgin Lending, which bought Circle Lending just before the crisis, and then folded shortly thereafter.

Looks like National Family Mortgage has gotten organized to fill the void, per Kathleen Pender's Chron story in July.  They charge $725 to originate the loan (set up, record and handle 1099 forms at the end of the year), and then there's a separate $15/mo servicing charge (to cover sending out monthly mortgage payment bills, letting you know if a payment issue comes up), which can be paid by the lender or borrower, at your direction.

Note that if you were to "gift" funds to a relative, you are liable for gift taxes.  The IRS has a "Applicable Federal Rate" which is a safe-harbor rate that avoids any liability.  It's currently just over 3% for a long-term loan.  So while market rates are closer to 4.375% for a 30-year loan, you could lend a relative at 3.06% and not worry about whether a portion of the arrangement would be considered a gift by the IRS.  The program allows you to set the rate at whatever you agree on.

See their site at, and/or check out a guide to borrowing at this site.

By the way, I've turned a few clients who are not yet ready to buy or sell onto the IRS's taxpayer guides to buying and selling.  They have great FAQs and scenarios.  (I send these links out, along with the settlement sheet from transactions, to each of my clients on 12/31--who wants to go hunting for that one piece of paper when organizing for taxes when I have it tucked into my "settlement sheets" file at the office?)  See this site/doc for potential buyers and this site for potential sellers.  Is that new roof a expense related to the sale or an addition to basis, or neither?  What about an upgrade from vinyl to hardwood in the kitchen?  Can you deduct transfer taxes?  Loan points?  The answers might surprise you........  As always, talk to your tax professional first and last!
Merritt College Plant Sale Coming Up this Weekend

In the middle of a drought, don't forget that natives and Mediterranean plants are great ways to reduce water consumption in your yard.  Merritt College's non-profit plant sale happens this Saturday (9-3) and Sunday (12-3) at the College up Campus Drive.  See for all the details.  

Competing for your attention is the Ruth Bancroft Garden's plant sale also on Saturday 11-3 pm in Walnut Creek.

The following weekend is the native plant sale sponsored by the CA Native Plant Society, this year on October 18th at Hidden Villa Ranch in Santa Clara (do elementary school students still go to Hidden Villa for their eco-education overnight?).  October 19th, go local to the Friends of Sausal Creek sale at Joaquin Miller Park 10-4 pm.  Combine a plant sale and a Lawrence Hall of Science visit by stopping by the UC Botanic Garden's sale also Sunday 10-4 pm.  See their blog for more info.  

Bay Area Wide Market Trends--

If you have an interest in property values elsewhere in the Bay Area--thinking about a move or looking at current values of an investment property--take a peek at Pacific Union's regional report for 2Q14 (this quarter's report will be coming out soon--keep an eye on my blog (  Lots of data, and it includes nice insights from the various regional VPs--remember we have offices throughout the Bay Area and in Tahoe, in contrast to the red guys.....

Also Courtesy of Pacific Union, and Christie's International--

You know Pacific Union is the longtime regional affiliate of Christie's International Real Estate, right?  Christie's puts out a great read every quarter--check the last issue out here.  It's not just a compilation of big houses!

A Few Garden Ideas

--On Sunset Magazine's site is a nice set of suggestions for great fall color.  Think about shots of orange and purple, combined with waving grasses.  

--Are you yet addicted to Gardenista?  The NYT's Michelle Slatalla's current roost, it's cooler than Sunset, and covers plants, hardscapes, floral, and has great graphics from correspondents in a few locations around the world.  Because it's based here, much of the international coverage tends to be in other Mediterranean climates--South Africa, Australia, Spain and Italy, and so on.  

--Been to the Bayview to Flora Grubb's shop?  I hear succulents are heading toward passé, but otherwise, it's a great idea generator.  

Enough about You; Let's Talk about Me (and Pacific Union a tad...)

This has been a very big year for me, and for PacUnion.  You've probably seen the graphically striking full-page ads in the Chron pointing out that we have the most productive agents ($ sold/agent), the fastest growth rate, and the largest share of sold over-$1 million homes throughout the Bay Area.  We've also been getting great press and awards for our website, and for our big presence in China.  We have an office there, key staff have made several visits, all our listings are uploaded to the equivalent there (with text translated of course) and our concierge office here handles incoming inquiries ("I'd like to buy x house in Piedmont," as well as "I need a Chinese-speaking agent to help me buy my son a condo in Berkeley while he's at UC"), as well as advertising opportunities in a range of Asian pubs.

Meanwhile, back at the ranch, I've sold a bit under $25 million in real estate in the past year--85% of it in Piedmont.  Prices have ranged from $665,000 to--oops I can't tell you because my clients' offer was confidential, and I never violate a confidentiality commitment.
A bit less than half involved buyers, and I represented sellers (or renters!) for the balance.  

Of greatest interest to me is how I stack up against the "typical" sale.  On average, homes closed in Piedmont at 8% over the asking price over the same period.  In contrast, looking at my buyers and sellers, my buyers closed at an average 7% below asking, and my sellers closed at 24.6% above asking.  

You can achieve that kind of performance while being a jerk, yelling and screaming, and developing a reputation among agents and clients for lack of transparency and ethics.  Actually, I'd argue that you can't, and have always approached my business hoping to deliver thoughtful, insightful advice in a collegial fashion while keeping my clients' interests paramount.  Click here for more of what my clients say.

Should I Sell my Home Off-Market?

I don't know why it took me this long to mention this, but this spring, I had a client who thought seriously about selling his home off market.  Price was important, and privacy was not a big issue.  I argued that to get the best price, there's no doubt the best approach is to stage, market a home very strategically, and open it up to the broadest range of potential buyers possible.  You want multiple buyers, in part to keep the prevailing buyer "in line."  Off market, too often, the sole buyer thinks s/he is doing a seller a big favor, and begins asking for lots of concessions in return.  

Of course I know I'm the agent and you're the principal, so I do whatever you tell me to do.  In this case, the seller was convinced to list the house off-market with another brokerage in town.  They opened it up unstaged, to about a half-dozen buyers working with (only) their agents.  None felt the look of love, and the seller felt that none was really properly pre-selected (we agents typically will bring all financially qualified buyers to an off-market listing, in part because our buyers would want to get in when others can't (why? They are hoping for a bargain.....)).  The asking price was x.   No bites.  Not even an offer below asking.

I got the listing a few days later, staged, cleaned up the tax record to reflect about 1000 sf of permitted additional space, did a bang-up marketing job, and put the house on the market shortly thereafter for 93% of x, hoping for x or more.  

The prevailing buyer closed with zero complications at 27% over x (and 40% over asking).  

There were a number of extraordinarily strong offers, and the three strongest were from agents who don't traditionally work in Piedmont--two from Berkeley and one from San Francisco.  (You remember my story a few years ago that in a year with say 140 sales or 280 "sides," there were something like 200 different agents and dozens of firms which had participated in the Piedmont market?)

100 Echo--On the Market Summer 2014

Gorgeously Renovated, Meticulously Maintained, but First-- 

If You're Under 50, You Still Hafta Read This---

You might have noticed my reference last week to "AARP-certified"--a young buyer came into a recent level listing and said "my mom said this home was AARP-certified."  What a great concept.  For the last few months, coincidentally, I've been making my way through
The Accessible Home by Deborah Pierce (feel free to contact me to borrow it).  Pierce creates a roadmap for owners looking to accommodate: 
  •  regular visitors with accessibility challenges (I regularly hear "this house won't work for us--my mother can't handle all those stairs when she comes for dinner"),   
  • themselves at all ages,  
  • a disabled child, or  
  • a disabled partner.  
Her mantra is "Universal Design Equals Intelligent Design," and she's so smart!  Think about how much easier it was/is to use strollers on corners with curb cuts ostensibly for wheelchairs, or to change diapers in the disabled bath stall.  And think about how many of us are likely to be inviting our parents into our lives and households in the coming years.
Much of her thinking looks at changes you can make (or plan in a renovation) that are great now, but lifesavers later (and think about the costs if you had to move because a home no longer met your needs).  Asking the right questions is as important as the anticipated needs you plan for.

Key insights for all of us include: 
--Closet planning can increase efficiency by 60%.
--Knobs are a problem; cabinet pulls and door lever handles are not.
--Pocket doors (and "barn" doors) can be really useful in avoiding do-si-do routines.
--Low maintenance layouts and surfaces are good for everyone.
--Can everyone get out safely in an emergency?
--Changes in stone or pavement color (slate to concrete) can signal surface or slope shifts, particularly for the visually impaired.
--Drawers for the fridge, for pots, for files are easier for everyone to access, as are side-swinging oven doors (Gaggenau has had them for years).
--Think about easy and rain-protected ways to get folks out into fresh air--level-out decks, etc. turned me onto the notion of placing shower controls in a location that doesn't involve your getting wet every time you prep for a shower (try doing that in a wheelchair!)
--Bay windows are another way to create "elbow room" in tight spaces.
--Think about dual purpose grab bars/towel racks. 
--Planning in laundry rooms and mud rooms is key.  There's a lot of maneuvering that goes on in each, and a washer and dryer in the basement is a pain for everyone, including kids who can otherwise help out.
--In-bath storage.  Use for linens now, and various medical supplies later. 
--And what about a bidet after all, for keeping things clean?  Those Japanese toilet retrofits (Google "Toto Washlet") work really well.
--Don't forget the needs of a caregiver (my new listing at provides a great private housing arrangement.....)
Lofts can often be just the ticket--they typically involve elevators, low-maintenance concrete floors, wide spaces and modular functionality.
Note that the City of Piedmont, when recently overhauling its zoning code, added a "reasonable accommodation" reg.  Historically it was very difficult to get a permit for otherwise-prohibited renovations needed for various disabilities--say to convert an existing half bath to a full bath in order to allow an owner to live comfortably on one floor, or to expand an entry porch roof into a setback to provide a sheltered area for someone to get keys to open a door.  And frequently these adjustments had to come out when the owner sold the home, even though that meant the home again became less-accessible--a particular problem in Piedmont given that our housing stock is so old, on average.  Now, the City "may" require that the space be returned to its original status, or it "may" leave that more accessible home as-is for future owners.  See Chapter17.22.a of the City code for more.
And finally, I've mentioned it before at Margie Bowman's suggestion, but take a peek at North Oakland Village for thoughts and resources on how to stay in your home longer--assuming that's your preference.  If you're happy to move, just call me and we can make that happen too!
100 Echo Avenue, A 3/2 Home with Legal 1/1 Unit
Tucked between the Piedmont Line and Piedmont Avenue

Sunshine yet Privacy

Gorgeously renovated with careful attention paid to form and function, 100 Echo Avenue is tucked between the City of Piedmont border and Piedmont Avenue Elementary.

Handcrafted Details Joined with Comfort

Walk through the gate under the handcrafted rose arbor and through the garden,

and then revel in the historic home's gorgeous architecture, great light, thoughtful details, remarkably open layout, and fine materials--

--host family and friends in the unique octagonal dining room with its coved ceiling, cozy fireplace and open connection to the kitchen;
--convene the book group in the large living room, while your spouse relaxes in the main-level parlor (originally a bedroom) or in the hot tub in the private rear garden;
--enjoy a bath in an original cast iron tub on the main level, or step into the upper bath with its luxurious warm floors and roomy stall shower;  
--prep breakfast or dinner in the light and bright recently renovated kitchen with its heated tile floor and high-end finishes;
--appreciate the home's many built-in shelves, discreetly placed closets (including cedar-lined closets in the master), and thoughtful storage solutions.

Take Advantage of the East Bay's Walkable Lifestyle

The secure and dog-friendly fenced home is just a long block from Piedmont Avenue and its cafes and prized restaurants (including Michelin-starred Commis, and highly rated Baywolf, Gregoire, Dopo, and Homestead), the Piedmont Theater, Piedmont Grocery and other amenities.  Hoping for a big flat yard?  The playground of up-and-coming Piedmont Elementary School is just across Glen Avenue (as is the new Piedmont Avenue library); several private elementary schools are within a few blocks of the home as well.

Further afield are Lake Merritt, with its 3.5 mile run-walk trail, 700-acre Frederick Law Olmstead-designed Mountain View Cemetery at the top of Piedmont Ave., and the East Bay's parks-beloved photographer Galen Rowell said in Bay Area Wild, "we bought our ... home so we could run, hike, ride, and bike the extensive trail system through this section of a thirty-mile greenbelt that rims the back of the East Bay hills from Richmond to almost Hayward....No other major metropolitan center in the world boasts such an extensive system of wild greenbelts.... For years we surprised out-of-town guests by taking them on wildland walks along our favorite trail, frequently seeing deer, foxes, and coyotes at dawn or dusk."

Hop on an AC Transit bus to downtown Oakland, the nearby McArthur BART station, or to San Francisco's Financial District (WiFi included!)--it's all so convenient you can sell the car!  College Avenue, Berkeley's Elmwood, and Oakland's hip Uptown neighborhood (home of Art Murmur) are all closeby, as are Routes 580, 880, 24, 13, OAK and SFO.

An Eco-Friendly and Efficient Option, Done Right

High-End Sun-Drenched Kitchen
Too frequently, buyers ignore a home's infrastructure.  These smart owners have not!  Through several rounds of renovation, the owners carefully upgraded to double-paned windows, high-efficiency furnace, Icynene insulation, Energy Star appliances and water-wise fixtures.  The roof is sound, the foundation upgraded, the sewer lateral replaced, the garage is practically new, the galvanized plumbing is replaced with copper, the seismic work is done, the drainage system is tried and true, and the pest inspection is under $2,000. 

Moreover the homeowners have been great stewards of the place.  They continually amended and enriched the property's soil, and used only natural fertilizers and pest control.  (The garden's snails were for many years collected and sent over to the elementary school to feed the ducks and chickens that were raised there by a teacher!)  Hummingbirds and butterflies enjoy the garden's carefully selected plantings. The home's layout and energy flow was improved based on feng shui consultations, and in front, a gorgeous rock "anchors" the home to the surrounds.

The Lower-Level Unit Offers Great Flexibility

Legal Unit Below
Originally a single family home when built in the early 1900s, and a legal tri-plex more recently, the home has been used as a single-family home with a sound-insulated and attractively updated and spacious legal 1 bedroom/1 bath unit below for many years.  Perfect for visiting relatives or friends, for an au pair or caregiver, for college students or as a large home office, the unit also can provide the buyers with a prudent financial cushion if rented out.