A lot of my clients ...like everyone who bought after 2003...are wondering when we will be getting back to the good ole days in East Bay real estate, ie, the highs of late 2006. Well, we’re not there yet. But we’re getting close. Over the last six months, East Bay home prices have made remarkable progress. In fact, it’s the first time in five years we’ve seen a definite and sustained upswing in prices.
For instance, the average home price in Berkeley for the last six months was $694,365. That’s 4.3% above the same period last year. And in Oakland, the increase is even more … the average price in Oakland for the last six months was $419,823 — a 13.2% increase over last year. Compare that to 2006 and we’re still 14.8% less in the case of Berkeley and 4% in the case of Oakland. Piedmont, Alameda, Albany and other neighborhoods have similar stats. The good news is that there are still opportunities out there for definite growth in real estate … albeit a measured, steady growth in the 3-5% arena.
But the really good news is that interest rates are now hovering around 3.5% for a conventional mortgage. Payment-wise, that’s 32% below what you’d be paying at 7%, which is where they’ll be once the Federal Reserve stops subsidizing. Looked at another way, you can buy 32% more house for the same payment! Which makes this an incredible opportunity to trade up, buy, invest or refinance.
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