Home & Garden Columns
Lately I have been known to make outbursts over my Sunday morning cup of tea. It’s usually because I’m reading an article in a local paper purporting to give an update of our real estate market. Some of the articles come from wire services and describe a totally irrelevant national picture. Other times the article is describing the “local market,” but what they’re really discussing is the entire East Bay, from Hayward through Hercules.
“Which planet are these people on?!” is a common question I ask whomever will listen. But mostly I am asking myself: how do I best counter this misinformation for my new buyers?
I am someone who likes a challenge, but lately several articles in the print media have made the task of educating my clients all the more difficult. This Sunday’s example was a headline declaring: “Home buyers now have the market advantage.” Explain that to the 18 buyers who competed on a fixer this week in Albany.
When I visited the brokers’ open the agent was standing in a flooded kitchen wielding a mop. Two of the offers she received a week later ranked as “ridiculously high.” A lovely traditional home in North Berkeley listed at just under a million received nine offers and went “really high.”
The week before, a home in a coveted block of the Claremont that had been listed in the fall but did not sell, came back on the market. It received three offers and supposedly went from just under $2 million to $2.5 million. In the same area and same week a home listed for $1.35 million, fully updated, received three pre-emptive offers. Multiple offers, pre-emptive offers, contingency-free offers, concessions to the sellers such as free rent-back: we’re seeing it all again.
To make any simple declarative statement about our market is always risky. To declare what we’re experiencing locally as a buyers’ market is just inaccurate. In my role as a director of the California Association of Realtors, I speak with many colleagues throughout the state. I certainly hear about communities where much of the inventory sits for several months before receiving an offer.
I’ve heard about the huge number of condos for sale along that long beach in Long Beach. And I know that outside of California there are areas of true market devaluation. I also know that you don’t really have to go very far from Berkeley to find pockets of inactivity. In Richmond there are currently 150 two bedroom, one bath properties on the market. That’s more than the entire inventory of Berkeley. And indeed things were slower even here last autumn.
But right now, in the first part of March, in all price ranges in Berkeley and the immediately adjacent communities, we are experiencing an active market. And it’s following a familiar pattern: the buyers are ready before the sellers. It makes perfect sense: buyers must decide that they are ready to make a move, and ideally speak with a responsible realtor and a trusted loan broker.
The seller, on the other hand, must not only prepare mentally and emotionally, but must start disposing of possessions, pack the rest, choose a listing agent and make the myriad other decisions required to effectively sell one’s home. And they may also be involved in buying on the other end. It is not shocking that the basic equation of supply vs. demand is producing, in the early spring, a little flurry of activity and the return of multiple offers in many cases.
The imbalance between buyers and sellers seems especially acute this spring. My guess is that all those buyers who were sitting on the fence in the fall, hoping that prices might actually drop, have realized that’s not going to happen. So we have the holdover buyers from 2006 joining some number who would normally have joined the fray in 2007 anyway, producing an especially high number of buyers ready to pounce on a small amount of inventory.
The sellers who either had no choice but to sell now, or who were contrarian enough to believe that there never was a bubble, have benefited from being ready early in the year. The question no one can answer is: once this “glut” of buyers has made their purchases, will the market continue to be strong?
It’s true that not all properties are experiencing blissful results for the sellers. A house with a quirky floor plan, or one needing major structural work, or one that appears over-priced will sit around in any market. You’ve probably heard it before, and it’s still true: homes that are priced appropriately, and perhaps a wee bit low for what they are, that are presented attractively and marketed actively by a trusted agent will do well in any market. If they are in a desirable neighborhood, and are mostly updated, then they have even more advantage.
When people learn that I’m a realtor it is common for their next question to be “So, how’s the market?” The only truly valuable market update is the one provided by your agent, who knows your priorities, who knows what neighborhood you want to live in, who knows your price range, your taste, your ability to accept risk and how quickly you need to move.
The good news is that the annoying article, having proclaimed a buyers’ market in the headline, went on to urge sellers to choose an agent who was a good communicator, someone who could present a solid market plan and would market the property extensively. That’s good advice in any market.
Arlene Baxter is the 2007 President of the Berkeley Association of Realtors, and an agent at Berkeley Hills Realty. You may reach her at email@example.com. The opinions expressed are her own, and not necessarily those of the BAR.