You've all seen the headlines: Plunging Prices, Stagnant Sales, Foreclosures lurking. The Berkeley, CA area market has remained stronger than most during this market correction. But this past month most of the extended Berkeley area has seen very limited activity. In the past three weeks less than one property has closed per day in Berkeley, CA. Of those 20 sales, 6 closed above list, 8 closed at list, and only one was more than 10% below. Thirteen of those sales were between $200K and $510K, with high price at $1,175K (two of those). Sold prices are more than $100K below last December, and for the first time in several years our median is below $500K ($498K median vs. $603K a year ago) and down substantially from last month's median of $745K. Of the single family homes under contract in Berkeley, CA last month, 1/3 were foreclosures. Sold prices per sq. ft. in Berkeley started the year around $375, rose to a high of $430, and are now back down to approx. $380. The all-time high was over $575/sq. ft. at the beginning of 2006.
This Christmas Eve there were 112 single family homes on the market in Berkeley, CA, on average for more than three months. And a median price of just below $500K is 20% below last year's at this time. Albany has 10 single family homes on the market, one a foreclosure, one a short sale, and most have been on the market for more than two months.
For many buyers I was still writing two or more offers before getting into contract, but this fall I was fortunate to get two sets of buyers into contract without competition on lovely homes in great neighborhoods -clearly a sign of a changed market. But at the same time a buyer had to compete against three other offers to purchase an especially nice condo on the Rockridge border.
Here's my summary of what's been happening lately on the buying side:
- Even the gorgeous interest rates weren't enough to motivate buyers unless there was some factor in their lives compelling them to buy now. Job uncertainties are trumping low interest rates
- Normally when rates start to rise after being at a low point, that triggers activity among buyers. That didn't happen this time, perhaps partly because it hit in December
- Buyers are counting on prices dropping further, and are waiting for that to happen, even in areas where we seem to have already hit bottom and are starting to see prices inch up
- Most buyers assume it's their market, and want homes to be priced as bargains
- Cash is not always king in this area. In strong hold-out neighborhoods, like Thousand Oaks or Northbrae where multiple offers are still occurring, price may win over all-cash offers
On this rainy Christmas day I'll take the rest of the day off to bake pumpkin bread and enjoy the company of friends (actually several of them former clients), their dogs and cats and my dear husband. Hope this is a day full of warmth and friendship for you as well!