If you read the headlines these days, it’s hard to figure out what’s happening in real estate: "Home Prices Plummet,” “Mortgage Rates at All Time Lows.” That may be true, depending on where you’re coming from. But according to Bay Area Real Estate Economist Carol Rodoni, the worst is over for the Bay Area. And my “woman on the street” view bears this out. In general, there’s more activity: more buyers are out looking and more buyers are ready to buy a Berkeley/Oakland home. People are starting to think about trading up. There is a sort of cautious optimism, if you will. And, interestingly enough, about 80% of my transactions this year have had multiple offers ... and bids over asking.
Overall, prices are about the same as a year ago. In Berkeley, the average sold price for the past three months is $678,917 vs. $691,633 a year ago. This is only a 1 to 2% difference. In Oakland, the average sold price was $381,168 vs. $354,370 a year ago...7.5% higher! This likely reflects a changing mix of houses, since a lot of the bargain basement foreclosures of a year ago have been bought up. All of this points to a stabilizing market, the “New Normal.”
The good news against all of this is that interest rates are even lower than they were, with a base rate now that is close to 4% for a conforming loan compared to 5% at the beginning of the year. Buyers are starting to sense this won’t last, which is why we’re getting multiple offers. So the moral of the story is, if you’re thinking of buying or trading up, don’t wait. Buy now!
If you’d like to go over your options at this point … or have any questions on East Bay real estate or your mortgage, just give me a call at 510-847-2409. It’s always good to hear from you.