What have I seen over the last 3 weeks in the East Bay market? Buyers had been craving more inventory all year and May delivered with a spike in new listings. This also happened when buyers were bruised with the impact of the latest interest rate increase. Here is a real world scenario: I have clients who were pre-approved in mid March for a home purchase of $1.5M. They want to finance $1.2M. The rate increase made their future payment jump by $1000 per month. I am hearing from agents all over that they have clients feeling the same pain.
Last week, 2 of my listings heard offers and though both were special properties, they received fewer offers than listings that I had earlier in the year as well as the homes that I wrote offers on, but the offers were still well over the asking price with great terms.
So far I am not seeing much of an impact in the high-end market, particularly walkable homes in the $3M range (homes that tend to sell in the $3M+ range are often listed in the $2M+ range). I am seeing a higher percentage of cash buyers in this price range and typically their income and assets can absorb the impact of the interest rates.
Properties that I am seeing on the market longer than the typical 2 weeks are homes that may be unconventional that are waiting for the right buyer. For example, my fully vacant triplex was on the market for over a month last winter. The location was superb, (Rockridge) while a buyer may want to make cosmetic updates, the owners had made meaningful improvements over the years, and the place was cute! So why did it sit? There are fewer buyers who want to be landlords in Oakland and Berkeley due to the increasingly strict rent control and eviction laws, especially with the recent moratorium on evictions due to COVID. I knew the ideal buyer for this particular property was a buyer who wanted to occupy the place. This home sat on the market for 42 days and then a buyer saw the place and wrote an offer the next day for the price my clients wanted closing 21 days later.
What does this mean if you want to buy? Buy smart. Investigate the house to make sure you understand the condition, investigate the neighborhood and make sure if you write an offer you will be happy if your offer is accepted. Something I have told my clients for years: see a house and notice if you are thinking about it the next morning. If you are not, that says a lot. I know money is more expensive, but it still may be worth stretching if that means you have a house that fits your needs for a longer period of time. Buying a house is like buying stock, the longer you hold on to a property the higher chances you have for greater appreciation. I advise 7 years+.
For sellers, hearing that there is a chance you may earn a little less in sales price than your neighbor did last month is a tough pill to swallow – I get it! Your house will sell, especially if you showcase your home to appeal to today's buyers. There is an art to analyzing a house and creating the most effective pre-marketing plan. Make your house memorable for buyers.
Whether you are a buyer or seller, I am happy to listen to your goals and provide insight to help you decide what is best for you!
