Understanding the Market as a Buyer

This week a client came to me who is considering a move from the East Coast for retirement.  They live in a wonderful community in New York and want two bathrooms.  It is funny how two bathrooms is considered a luxury in some highly sought after neighborhoods!  They have a son who lives in the Northbrae neighborhood of Berkeley and they really like Solano Avenue area for the walkability.  Today I drove them around and had these charts created so they could better understand our market, as it is very important to understand the market as a buyer.  Remember, listing price often times has no correlation to sold price. Blog chart pg1

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Buyers are Craving Quality Inventory

Last week I reviewed offers with three sellers on properties. Each was in a different Oakland neighborhood. The properties are now in escrow, two with accepted offers at more than 20% over the asking price. The third property also did well, but is selling at just 5% above the listed price. Each property received the same treatment: careful pricing to generate maximum interest, meticulous preparation, professional photography, and custom web sites that tracked and verified similar levels of consumer interest. Why did two homes go so high while the third did well, but not as well? The fact is buyers are craving quality inventory. They will pay high prices, but they carefully analyze the suitability and appeal of the home they are buying. Here are some features that add value:

  1. Natural light
  2. Flow to the outdoor spaces; people love kitchens with French doors out to the backyard
  3. Parking and access from the car to the house
  4. Real hardwood floors and original details

Here are some factors that do not add value:

  1. What you want to yield from your sale
  2. What you paid for the home
  3. What your neighbor's house sold for a few months prior
  4. Newer finishes that are dated; buyers will not pay extra for something new if they don't love it

And then there are location details that typically reduce buyer interest: a busy street, a corner lot, or close to a freeway and its noise. Those external issues affect value and need to be considered when pricing your property and setting your expectations for results.

My job is to get your home sold for the highest price that the market will bring. That begins with helping you benefit from my experience so that you can see your home from the market viewpoint. With this understanding we can work together through any sale confident that, in the end, we attained the best result possible for that house, at that time, in those market conditions..

If you are considering selling your home, let's talk!

Oakland's 146 neighborhoods, in their own words

I was happy to make a small donation and even more happy to hear it is now fully funded!  Stephen Texeira's The Oakland Neighborhood Project is a very cool photographic story telling about Oakland and its vast array of people.  Please click on the links below to find out more! [embed]https://www.kickstarter.com/projects/2056607570/the-oakland-neighborhood-project?ref=checkout_share[/embed]

http://www.oaklandphoto.org/

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YOUR NEIGHBORHOOD AMENITIES

A huge asset to living in Oakland are the local amenities.  Are you utilizing what Oakland offers in your neighborhood?  So many of us, are stuck in our routine and do not venture out to explore the oaks and redwoods that are clustered throughout of town. Check out this Trailhead documentary of Oakland that I am proud to be sponsoring and was interviewed for, "Discovering Oakland's Gateway to the Redwoods". We filmed this @Bellanico in the Glenview.

http://trailhead-dimond-park.org

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Natural Hazards, where does the fault lie

When meeting with new clients, I always have a conversation about natural hazards.  The reality is, one will have to determine their comfort level when it comes to natural hazard zones before they enter into a particular transaction.  Many of my clients feel that it is inevitable that one will live in an earthquake fault zone, while others are adamant about living outside of that zone.  Additionally, there are other hazardous conditions such as high fire, liquefaction and landslide to consider.  In this seller centric market, many buyers will overlook hazards to win a property, but keep in mind, when a market shifts and inventory is higher than the buyer demand, some buyers may be discriminating when it comes to what they will accept or not.  Last fall, I had a heart-to-heart with buyers who were strongly considering a home with the trifecta of natural hazards: earthquake fault, landslide and fire zones.  I shared with them this could potentially impact future resale value.  After sleeping on it, they decided not to write an offer.
This interactive website was provided to me by one of the structural engineers that I have worked with. http://pubs.usgs.gov/ds/2006/177/HF_zoom.html
USGS Hayward Fault

This one is gone, but not forgotten!

A few weeks ago, I saw this home out on Broker's tour. Over an acre of mainly level gardens and on the market for the first time. 13281 Skyline Blvd is the home of master gardeners and members of the American Rhododendron Society, these grounds are luscious! Listing courtesy of Martha Hill, Pacific Union.

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Out on Broker's Tour

I'm always fascinated by the different homes I get to view on our weekly broker's tour. I really liked the two homes below, listed by GrubbCo. 46 Melvin Court reminded by of a wooden labyrinth puzzle and felt as though it should have a fridge full of Tab Cola.

Source: The Grubb Co.

Source: The Grubb Co.

Source: The Grubb Co.

123 Wildwood Gardens in Piedmont had one fantastic front door, original details and a backyard out of a scene from a movie.

Source: The Grubb Co.

Source: The Grubb Co.

Source: The Grubb Co.

Styling, It's Not Just For Celebrities

Every house has a different vibe, style, and architecture. When prepping a property for sale, its individuality should be taken into consideration. Not every home should have a mass produced feel with the same ol’ furniture and marketing. Even though it is a seller’s market there are properties that are not selling and some that are selling short of their potential; therefore, it is important to highlight characteristics and do the proper preparation to stand out from the rest. It is all about collaboration. I work with four different stagers and pair the stager’s style to that of my client’s property. Often it is the little touches that make the difference and set one listing apart from another. I attend Designer Showcase Homes to educate myself on what buyers want and to give expert insight.

Light fixtures and colors are similar to belts and shoes; they have to go with the outfit.  You want your property to look good, right?  Not every house is already adorned with a gorgeous vintage dining room light fixture but adding one can be the key accessory in giving off just the right vibe to prospective buyers when they preview the home. The wrong styling, or repetitive styling, can leave money on the table. When the market shifts, how will your house stand apart?

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How much does a backyard pay you?

As I am reviewing some sold homes that earned multiple offers, selling over the asking price; I saw a common thread - really cool outdoor space!  Indoor-outdoor flow is a vital part of California living and a special backyard can make a small house feel bigger.  For the property below that I listed last year in Rockridge, I spent some time browsing on Houzz and Pintrest to see what I liked. I then shared my likes with my clients and we came up with this.  

This is the backyard at 406 61st Street in Rockridge before we placed it on the market.  My clients had always wanted to renovate the space, but after an extensive interior renovation, they  put the outdoor space on hold.

Here it is after flagstone, raised veggie beds and eco-lawn was installed with an irrigation system.

A view from the

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

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

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

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

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

Photo credit: Deidre Joyner