buying smart in this market

I am currently trying to find several buyers homes. The challenge is that new listing inventory is down by 12%, so there is heavy competition. Buyers are frustrated: few homes are available, and determining the appropriate offer price is particularly challenging.

When trying to determine the right offer price with few sales, looking at comparable data often won’t cut it as our inventory is unique and sold data captures history, not the future, of value. This means that you have to analyze the market condition, the property condition, how much you love a home and the level of interest among other parties.

I strongly discourage buyers to write offers when they have a very low chance of being the winning bid. The first thing to understand as a buyer is listing price often has no correlation to real value. A seller can price a home at $1 to create an auction-like frenzy. In fact, the more offers a seller receives, the higher their price may go.

How does that affect you? When the next homeowner prices their property, the comps and competitive market dynamics will lead to a higher price.  You have just contributed to a market increase.

Last year I had several clients who did not want to adjust their search parameters to better meet their budget. They felt there was a chance (although slim) they could find that rare property that fit all of their requirements . That rare property didn’t show up, prices continued to increase, and they were priced out of the market.

The bottom line is the Oakland and Berkeley marketplace is very unique, no two homes are alike. Don’t  buy something that you do not want, but be sure to balance market realities with your expectations. See the chart below regarding the current inventory.

This chart illustrates what many buyers feel

This chart illustrates what many buyers feel

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How Important Are Trees and Landscaping?

I was reflecting on some of my past listings that had that magic factor, the homes that had more than a half dozen offers and here is one common thread, the outdoor space was often thoughtfully maintained and improved – a place that many buyers would want to seek refuge in .  Mature trees have many benefits, they provide cleaner air, shade, a picturesque outlook, privacy from neighbors, and sound when the wind sweeps through the leaves.  San Francisco magazine did an Oakland issue last year, as so many SF residents are migrating to the Oakland marketplace.  One of the main reasons – we have backyards!

Guido_TREE

My client Cassidy is the Vice President for Tree Sculpture, http://www.treesculpture.com/contact-us.  If you have valuable and/or large trees you may want hire an arborist to maintain and keep them healthy.

Cassidy sent this information over to me as he understands how valuable trees and landscaping is for homeowners:

Due to the prolonged drought, trees throughout our region are under extraordinary stress. As a result, many tree species are much more susceptible to breakage and failure… especially with the winds and rains associated with winter.  Knowing what signs to look for and performing proper preventive care will reduce potential hazards and help to preserve the health and beauty of your highly valued trees.

To learn how to identify 6 potential hazards and 5 actions to take to preserve your trees, please visit: http://www.treesculpture.com/blog

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Walkable Neighborhoods

Many of today’s buyers are willing to pay a premium to live in a walkable community.  Here are the median prices of some sought-after neighborhoods in Oakland and Berkeley. Keep in mind, with charts like this, one outlier property that sold very high or very low can skew the median prices.  To truly understand what a home’s value is, one must analyze property condition, disclosures,  inventory levels and property interest. Additionally, I was aiming for neighborhoods where the median price was about 1 million bucks and this is why these neighborhoods were chosen.  What are your thoughts about prices these days?

 

This data was collected in mid-December

This data was collected in mid-December 2014

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Majestic Metal

The other day I was showing my daughter’s friend from Ann Arbor, Michigan around Downtown San Francisco and Oakland. As we crossed the Bay Bridge into Oakland, I was pointing out the cranes at the Port.  I love the lines of these majestic metal creatures and how they are a landmark to our city!

Photo credit: http://www.karlya.com

Photo credit: http://www.karlya.com

Below is Jack London Square with the cranes in the background.

Photo credit: Deidre Joyner

Photo credit: Deidre Joyner

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