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How Graphs Can Help Buyers
July 9, 2011 | 
Author Often times people know what they want, but have no idea what it costs. I would love to live in Upper Rockridge for $600,000, but I know that is not feasible.
A client came to me looking to buy a home in three specific neighborhoods – Rockridge, Claremont and Crocker Highlands.
He came to me with no real knowledge of the market or what these neighborhoods typically sell for. So as a way to help familiarize him with the market and the prices that these neighborhoods typically command, I had these graphs made for him. After he reviewed them, he was able to determine if these neighborhoods would in fact fit in his budget.
Below are some samples of the graphs I prepared for him: (Elmwood, Crocker Highlands, Claremont 1st quarter 2008 – April 2011)
Average Sale Price
Average Days on Market
Quantity of Solds
Posted in 
Buying A Home In Oakland? Buying A Home In Berkeley?
This photo is from the California Online Archives. Oak trees at Mosswood Park in Oakland
When you buy a home you buy a piece of the street and a part of the city.
Growing up and still living in Oakland, I often run into people I know. I can see the distress on folks faces as they ask me how business is. You can’t avoid all of media coverage regarding the declining real estate market. One would think that the entire real estate market has collapsed. Oddly enough my pressure-free, no nonsense approach to real estate has paid off and 2008 was a great year for my clients and I. Last month Red Oak Realty awarded me a Managers Award for 2008.
So let’s just look at real estate in Oakland and Berkeley.
Since January 1st 2009, 326 residential properties have sold! (The first 47 days of this year)
Compare this to 345 properties sold between the same time period in 2004
390 properties sold between the same time period in 2005
361 properties sold between the same time period in 2006
332 properties sold between the same time period in 2007
Only 186 properties sold between the same time period in 2008 – the start of one of our worst real estate years.
To make this short, buyers are back.
In Berkeley the average home price for properties that sold since January 2009 are as followed: average list price was $624,990 and the average sold price was $612,637. Sellers are getting 98% of their asking price on average.
In Oakland as a whole, the average home price for properties that have sold since January 2009 are as followed: the average list price was $ 79,464 and the average sold price was $84,599.
When I searched for homes in select neighborhoods of Oakland, Rockridge, Redwood Heights, Montclair, Grand Lake, Glenview, Lincoln Heights and Upper Rockridge the numbers went up drastically. The average list price was $601,102 and the average sold price was $582,941, seller are getting 97 percent of their asking price. (these statistics include condos and homes of all sizes.)
So what does this all mean? Well with 743 homes currently pending, (in contract to close escrow) in Oakland and 51 homes currently pending in Berkeley, buyers are feeling like now is a great time to buy a home in Oakland and Berkeley. There are experts that say the market will drop another 8-10% in the next year as unemployment increases and more mortgage interest rates adjust, but if you are trying to “time” the real estate market perfectly, you could miss the bottom and find yourself in a market that has increased in value. Berkeley median home price actually increase by 2% for the fourth quarter in 2008.
Consider this:
- It looks like Congress will increase the first time home buyers credit to $8,000 from $7,500. What more, this credit will not have to be paid back!
- As stocks seem more and more volatile and the health of major companies are uncertain, real estate historically proves to be a sound investment for long term wealth.
- With the Bay Areas ideal weather, are very close commute to San Francisco and UC Berkeley in our backyard, the Bay Area will always be highly desired.
- If you are now in a position to buy a home, buy the absolute best location you can afford. Work with a reputable local Realtor who is in touch with the Oakland and Berkeley neighborhoods and understands the subtle nuances that can make a difference in future resell value.
Transfer Tax Change For Alameda, Ca.
Effective December 12th, 2008 the city of Alameda increased their point of sale city transfer tax from $5.40 per $1000 of purchase price to $12.00 per thousand. There are two transfer taxes involved in buying a selling a home; county transfer tax is a generally paid by the seller when a house is sold. The county of Alameda charges $1.10 per $1000 of purchase price, so if a house is $500,000 the transfer tax will be $550. City transfer tax varies city to city, this tax is generally split 50/50 between the buyer and seller. So if you purchase a house in Alameda for $500,000 both the buyer and seller will pay, $3000 each as part of their closing cost.
Is a 4.5% Mortgage Interest Rate on the Horizon?
I surround myself with highly regarded professionals who support my clients and myself. This allows me to focus on one core thing; helping people obtain their real estate goals. Yesterday my client Jim called me and wanted to know more about the possible mortgage cut to a 4.5% mortgage interest rate. The following a fantastic email from Vince Wirthman of 1st Western Mortgage in Berkeley you can contact him at 510-527-2840.
If you have questions regarding home values or Oakland-Berkeley real estate, click the email button on the side of this blog, (deidrejoyner@gmail.com) or call me at 510.693.4253
Alright, everybody take a breath and let’s talk about what REALLY is going on.
Business television and newspapers are abuzz this morning with talk of “four and a half percent mortgage rates”. The talk stems from a leaked story that the U.S. Treasury MAY intervene in the mortgage market, IN AN ATTEMPT to lower rates by AS MUCH AS a full percentage point below their current levels. Wow. That’s pretty specific.
As cited by the more responsible journalists however, the story is 100% speculation. Naturally, that doesn’t stop the press from covering it. And, of course, it creates a wild frenzy of excitement in the real estate and mortgage industry and for homeowners. My message to Realtors and homebuyers in escrow or house-hunting and to homeowners who are refinancing is simple, and I state this with the full knowledge that at first glance some will think this self-serving – do not make the mistake of thinking that this hub-bub about 4.50% rates is a done deal. Do not stop your transactions or house-hunting based on something that may just as easily not happen. Talk this over in detail with your Realtor and mortgage professional and determine, for YOUR specific situation, what is the best course of action. As is the case with all things speculative, it’s important to remember to look at the facts and not be swept up by the media-sponsored frenzy. So what are the facts? Here’s what we know:
1. The Fed and the Treasury do not set mortgage rates – Mortgage-Backed Securities traders do, based on simple supply and demand. Look at the chart below. This is today’s chart of the price of mortgage-backed securities. Notice that nothing significant has happened today (last green bar to the right). Right now, the price of mortgage-backed securities is up only 12 basis points. Price going up means rates improving. 12 basis points is nothing, and won’t even get a lender’s attention. Note also that on Tuesday, Nov. 25th (tall green bar 6 bars to the left of today), when the Fed announced their plan to purchase $500 Bn of mortgage-backed securities, prices immediately shot up 156 basis points. That move gave us an immediate improvement in mortgage interest rates of .50%. and that was before the Fed spent even $1 on any mortgage-backed securities. That is because the market is forward-looking and prices-in known factors immediately. Today’s speculative rumor has given us nothing, so obviously traders and mortgage bond investors do not believe it. Mortgage rates have actually worsened in the last 3 days.
2. Treasury or Fed intervention doesn’t guarantee low rates indefinitely. The fact that mortgage rates are up by a quarter-percent since last week proves it.
3. Zero details about the plan have been confirmed. Everything you’ve heard about 4.5 percent rates is a guess at this point.
In order to ground my conclusions for this email, I sought out everything I could find about this story and have included some excerpts below for your review. Note that the language in these reports is purposely vague and quite weak. Maybe this rumor ends up being partially true, maybe it doesn’t. There are many reasons why it could happen, and there are many reasons why it wouldn’t. If something does happen, rates COULD go lower SOMETIME in the future. If nothing happens, rates could be higher by the time we know nothing is happening. We will just have to see how things develop from here.
“The Treasury’s consideration of additional efforts to breathe life into the housing market was first reported on The Wall Street Journal’s Web site. People familiar with the Treasury’s plans said that Treasury officials had met with top executives at Fannie and Freddie last week but that neither had been notified that any steps were taken toward putting such a plan into effect. By one account, the new program would be available only to home buyers, not to people who simply want to refinance their existing loan at a lower rate.” via NYTimes.com
Mortgage News Daily – The Journal reported that the government would encourage banks to issue new mortgage loans at lower rates by offering to purchase securities backed by the loans at a price equivalent to the 4.5 percent rate, funding the program by issuing Treasury debt at 3 percent. The Treasury Department plan is only in the talking stage and may not be ready until after President Bush leaves office on January 20 at which point it would be necessary for President-elect Obama to sign off on it.
CNN Money – Lobbyists are pushing the Treasury Department to consider a plan to purchase mortgage-backed securities in the hopes of driving mortgage rates to as low as 4.5%, an industry source said. Spokeswomen from Treasury and the Federal Housing Finance Agency, which oversees Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500), declined to comment.
“It is clearly designed to bring buyers into the marketplace and soak the inventory of unsold homes,” said Greg McBride, senior financial analyst at Bankrate.com. But others questioned whether rates would remain low and, even if they did, only a narrow slice of credit-worthy borrowers would benefit. Rates are already inching up, hitting 5.75% on Wednesday, said Keith Gumbinger, vice president of HSH Associates. Several government attempts to lower mortgage rates this year have failed to have a lasting effect.
Finally, super-low rates could keep private investors out of the mortgage-backed securities market, forcing the government to remain the primary buyer of such investments, Gumbinger said. “I can’t imagine there will be a significantly active marketplace of people who want to buy at these low rates,” he said. (That would not be an acceptable long-term situation, and the Treasury knows that.)
Thomas Vanderwell had this to say on his blog “Straight Talk About Mortgages:
“So far, the market has shown that they would rather earn less (frankly close to zero) and invest in US Treasuries than they would invest in mortgage backed securities. Given the history of Fannie and Freddie recently (how many billions did they lose in the 3rd quarter?) I’m not sure anyone can blame them. Can you?
So if investors are avoiding Mortgage backed securities like the plague, and there are trillion of dollars of them out there, will the interaction by the Fed make a difference? And if no difference is made, how will we get 4.5% mortgage rates? And if we do not get these 4.5% mortgage rates that homeowners will now expect, how in the world are we going to sell homes to people waiting for cheap mortgages?