I am back - February 2013 Oakland and Berkeley Real Estate Update

Sorry for the lengthy lapse in posts!  I have been very busy helping clients! Over the past few months, East Bay real estate has been a whirlwind.  The combination of low interest rates, high rents, and a surge in desire for homeownership has once again created a sellers market.  Prices in communities of Oakland and Berkeley are still not at the peak prices of 2005 through 2007, but they are up from the steep decline of 2008, 2009, 2010 and 2011.

The biggest equity gains in Oakland have happened in the the walkable areas such as Rockridge and Crocker Highlands. (See the stats for these neighborhoods at the end of this post.)  As more buyers migrate to the sunny side of the Bay from San Francisco,  a higher demand is placed on a home with an easy walk to coffee, restaurants and public transportation.  Lifestyle can often trump home size in importance.

For buyers it is important to consider that interest rates will likely rise as the economy improves. This historic window of "cheap" money will not last forever.  As a buyer, if you plan to keep your new home for a long time, you can count on keeping that fixed rate, low interest loan and will maximize the savings.  I suggest that my buyers consider purchasing a home that will fit their needs for a minimum of 7 years.

Is now still a good time to buy even when buyers must compete, and prices can go substantially over the original asking price?  My answer is yes. Consider this. A listing price is a marketing tool. Many sellers decide to price their homes under its expected sale price to gain maximum exposure during the period the home is marketed to the public. Using this tactic often means that a seller with a home that might be worth $800,000 will price it at $720,000.  When a buyer offers $80K over the asking price, their offer is actually spot on in regard to value. But stopping there does not take the competition into consideration. With multiple buyers offering to buy the same property, it is often necessary to bid even higher than fair market value to win the home. What a buyer should factor into the equation while they ponder what price to offer is,  the record low interest rates. At a 3.75% interest rate on an offer of $811,000 and a buyer just might beat the competition by offering a few thousand dollars more. For example, the monthly payment with a 20% down payment, (not including property taxes and insurance) would be $3004.69.

What's the risk in waiting? Using the same example, if the interest rates rise to 5%, (still a great rate!), your monthly payment would be $3482.90. That equals a $480 per month increase for the same loan. It equates to an additional $5760 per year and $40,320 over a seven year time span. If you decided that you wanted to keep your payment down to the $3000 per month range and interest rates went up to 5%, your buying power would equate to a purchase price of $700,000 as opposed to $811,000- decreasing by over $100K. The risk here is that there is no guarantee that home prices will decrease accordingly by 7%.

A final factor to consider is whether you will  benefit from a tax deduction.  For example, if you make $100,000 annually and pay $30,000 in mortgage interest, you will be able to deduct that cost from your income for a substantial savings. (Please consult your tax adviser for the exact tax saving).

Ultimately home ownership is a personal choice, and a big investment. As you consider whether buying a home at this time  is right for you realize the numbers are now showing that the current market is in a sweet spot. The prediction moving forward is that prices and interest rates are on the rise...

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Field Trip for Inspiration

The other day I took a few hours off to service my computer at the Apple Store on 4th Street in Berkeley.  I always enjoy strolling down 4th Street so after my computer was serviced, I meandered down the street. The Gardener is always a place for inspiration.  The scent and the styling  here always makes me salivate.  Here are a few things to inspire:

The Gardener
The Gardener
persimmons
persimmons
succulents
succulents

Yasai Produce Market on College Ave at 63rd across from Cole Coffee has wonderful affordable produce for sale such as gourds and persimmons that can be styled into your home instead of fresh flowers.

gourds
gourds

Roger Lee Home For Sale!

Roger Lee who is known for bring high design to the middle class is an acclaimed architect who designed roughly 100 homes in the Bay Area, Nevada and Hawaii.  If you are a sucker for modernist design, walls of glass and open space,  you may want to check out 20 Reed in Kensington, listed by Mark Hardwicke.  Listed at $729,000 and open again this Sunday.

Giving Back

Since 1985 ROOF, Red Oak Opportunity Foundation, has been giving back to our community by collecting contributions from our 4 owners and real estate agents and dispersing the funds to small local non-profits.  It is unbelievable that the small donations many $20 dollars each has accumulated to nearly $1,000,000 over the last few decades. Click here to see our 2011 recipients. Next month ROOF will have our annual Poker Tournament Fundraiser . $100 gets you a night of poker and snacks. If you have a poker face, please come! (Call me for tickets)

If you are a non-profit you can now apply for a grant online, click here. The deadline for grant applications is Nov. 8th, 2012.

To donate to our non-profit, click here.

I am proud to be a ROOF supporter!

 

 

Out on the Street

Many house hunters know that Monday and Thursday are Broker Tour days for the Oakland and Berkeley area. This is the day that Realtors tour the newest listings. Last Thursday I really enjoyed visiting Dee Knowland at her new listing at 6319 Brookside in Upper Rockridge.  Perched on top a hill this home is bright and sunny and perfect for executive living.  The rooms are ample and the seller has impeccable taste!  I love the simple kitchen with large pantry and French door out to the patio.

Asbestos

 

Asbestos was popular among home builders and manufacturers in the mid and late 1900's.  Widely used for its affordability and its resistance to fire, heat, electrical and chemical damage.  Asbestos was commonly used in electrical insulation and as an application for the exterior of heating ducts.  When asbestos fibers are airborne, they can cause serious illness, so it is recommended that any asbestos in your home is encapsulated or removed.  If you are looking at a property to purchase, do not be alarmed if you learn that the house contains asbestos, as I have first hand witnessed hundreds of homes with asbestos ducting.  Every homeowner is different and you may opt to encapsulate the asbestos or remove it.

After living in a 1951 home with the original heating ducts intact that contained asbestos, I finally had the ducts removed when I replaced my furnace. The process entailed several guys from Synergy taking  great care to tape off the the area surrounding the ducts that they were removing to ensure that no fibers would penetrate my home.  After a FULL day of hauling 21 long ducts out of my home, they came back to check the air quality to ensure the asbestos levels were safe.  The cost was $1500.

 

 

 

1936 Rancher Captured My Heart on Broker's Tour

Last Thursday I saw a house that I could picture my life in - 2665 Camino Lenada in Montclair. (Listed by Mindy Scott)  I drive down this street almost daily during the school year to drop my son off at Montera Middle School and I never noticed it before.  This street is typically tight with school traffic, but one of the special features about this property is that it is set back from the street on a  large lot size, (.33 of an acre) with plentiful and easy parking. If you decide to utilize the public schools, Joaquin Miller and Montera are a block away.  Additionally, Montclair Village is a few blocks away. This is not a mid century modern rancher, but a colonial rancher with 1930's details including, vaulted beamed ceiling in the living room and many traditional details.  The house just feels good with breezy indoor/outdoor flow, large rooms and great separation of space with an ample master bedroom.  Listed at $972,000, this home was my favorite property on Broker's Tour.

Tomato Season

 

I am loving this year's tomato season.  The tomatoes this year are sweet and juicy and perfect for bruschetta.  The best part to making bruschetta is it takes only a few minutes and an oven is not necessary.  Simply dice tomatoes, and add salt, pepper, extra virgin olive oil, finely sliced basil and minced garlic to taste.  Serve with sliced sourdough baguette that you can brush with olive oil and  toast on your barbecue grill.

 

 

The Market

Spring 2012 has shaped up to be a great for many sellers.  Buyer confidence in the real estate market, continuing low interest rates and a lack of quality inventory has created multiple offers galore.  Where I have seen the most action is: Piedmont, Rockridge, Crocker Highlands, Piedmont Avenue, parts of Montclair, North Berkeley and lower Berkeley Hills, parts of El Cerrito, Elmwood, Glenview, Lincoln Heights, North Oakland, and select homes in Redwood Heights and Upper Rockridge. Here are a few things buyers are going gaga for: Buyers know that the best investment is buying a home that will meet their needs for at least 7-10 years.  Therefore, buyers are looking to purchase a home  that they will not immediately outgrow - ideally having 3 bedrooms or some bonus space. Flow is important!  Many buyers like open space, and really good indoor/outdoor flow. This is sunny California! Al fresco dining is becoming a must... Although many people like the idea of fixing up a property, a buyer would prefer to buy a home that is move-in ready with a minimal amount of work. Natural light! Natural light and the warmth of sunshine makes people happy! Original details including hardwood floors, vintage tiles, period built-ins and mature native landscaping.

Price is key: If your seriously ready to move, when pricing your home it’s best to let go of the idea of recouping what you paid for your house when you purchased it.  Price your house according to today’s current market value using the most recent sold neighborhood data as a guide. You have the best chance of gaining market attention if you are priced slightly under market value.  Price is a key part of your marketing and can make or break the momentum. Although I recommend pricing your home as low as you can go, always list your home at a price you are willing to accept if there is only one offer. Some homes are getting multiple offers and some are not and ultimately your house will sell, (if marketed correctly) at the highest price a buyer is willing to pay.

Some recent stories from the field:

  • A completely renovated tasteful 3 bedroom/2 bath home in  Redwood Heights with great indoor/outdoor flow recently received 5 offers and is pending substantially over the asking price
  • A 3 bedroom/ 2 bathroom Berkeley brown shingle near the Live Oak district received 5 offers and is pending substantially over the asking price
  • A completely renovated 4 bedroom home in Lower Rockridge received 11 offers and is pending over $100+K over the asking price
  • A pristine mid-century in the Oakland Hills 2700+ square foot home with no view but a swimming pool and one bedroom pool house had 9 offers and sold over $80K over the asking price
  • A small 800+square foot 2 bedroom/1bath cottage with new roof, large lush landcaped backyard in the Lincoln Heights neighborhood sold over the asking price with 4 offers
  • A large 1940’s 2 bedroom home in the Laurel is now pending over the asking price after receiving 9 offers
  • A Montclair level-in home with gorgeous outdoor spaces and walking distance to Montclair Village had 11 offers and is pending over $100K over the asking price.

Buying a home in today's market

Compared to last year this is a completely different market for many reasons. If you are currently house hunting in the Oakland and Berkeley neighborhoods and are either tracking the market or bidding on homes, you are seeing multiple offers, aggressive bids that favor the seller.   The areas that experience the most competition are, Rockridge, Elmwood, Crocker Highland, and Piedmont as well as scattered properties throughout Oakland and Berkeley that have a "wow-factor" about them.  Twice in the past month, I have witnessed people dropping their appraisal contingency to get into contract.  This means:  A person offers $800,000 on a home, the appraiser deems the house to be worth $750,000, by dropping the appraisal contingency, the buyer is saying they will buy the house regardless of the appraised value.  If they are getting a loan this would mean in the example above that they would have to put an extra $50,000 down. Many people are tired of waiting for the "bottom" of the market and want to be homeowners now.  They want a place of their own.  They may want to take advantage of low interest rates and they know that renting has no long term return on their investment.  When supply is down and demand is high you will likely not underpay for a home, but there are ways you can make a smart move.  A few of my tips were published in the San Francisco Chronicle last Sunday.  Please contact me for more.  (click on image to enlarge)

 

lunch on the lake

When Lake Chalet first opened up almost two years ago, I was so excited about this multimillion dollar restaurant opening in my beloved Oakland on a transformed section of Lake Merritt.  I was disappointed the first few times that I dined, but I kept coming back, as I loved the space and lake view.  I recently had brunch at Lake Chalet, the service was great and I loved my Crab Louis salad! Lake Chalet

Lake Chalet
Lake Chalet
 Lake Chalet crab louie

 Lake Chalet crab louie

Romance is in the air

People are falling in love, (again) with the Crocker Highlands district of Oakland. The 1920's and 1930's homes in this handsome polished neighborhood that flank the Lakeshore retail district and Lake Merritt are selling quickly.  Since January, 11 properties a went under contract or have sold, averaging 14 days on the market. Take a look at this treasured community Red Oak style below and scroll down to view a Crocker Highland gem: http://www.youtube.com/watch?NR=1&v=4PhwUhZiEsU&feature=endscreen

Earlier this week, I fell in love with Anthony Riggins' (now pending) listing on Sunnyhills Road. This 1929 Spanish Colonial Revival pictured below was my favorite from Monday's Broker's tour and only lasted 7 days on the market.

1164 Sunnyhills 11
1164 Sunnyhills 11
1164 Sunnyhills 08
1164 Sunnyhills 08
Sunnyhills exterior
Sunnyhills exterior
1164 Sunnyhills 03
1164 Sunnyhills 03