Wednesday, July 20, 2016

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...... 

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