Wednesday, October 8, 2014

California Dreaming on Such a Berkeley Day / Living SF Luxury at Berkeley Affordability

View from
Fifteen years ago, Buyers looking for their Bay Area "dream house" were likely to tout a bay view as a top must-have. In today's market a view is still wonderful, but more and more buyers are willing to sacrifice a front seat at our beautiful sunsets for the more practical ability to walk to a local coffee shop.  At Berkeley Hills Realty we call this the "latte factor."

A noticeable shift took place in 2009 when a study, Walking the Walk, came out with a subtitle; "How Walkability Raises Home Values in U.S. Cities." The research shows that homes in walkable neighborhoods are worth more money in nearly all metropolitan areas. And yes, coffee shops count. The WalkScore algorithm used in the study looks at a multitude of categories; coffee shop, grocery store, movie theater, park, bookstore, drug store, clothing/music store, restaurant, bar, school, library, fitness, and hardware store. The study author, Joe Cortright, states, "An additional one point improvement in average Walk Scores adds between $700 and $3,000 to the value of a typical house, holding all other factors constant." Remind me to tip my barista.

Local amenities not only support the value of our housing stock and add to the joy of our daily lives-- they may just help save the planet. In June of this year, NBC News contributor, Diana Olick reported:
Car shares, bike shares, improved rapid transit and teleworking. All are the product of a new generation that is more environmentally conscious than any before it and more willing to use its own energy to get around town, rather than tapping expensive energy sources. Millennials prefer urban cores, even ones outside of major metropolitan areas, because they want to be able to walk or bike to work and stores.
Living the good life in the Bay that bears the name San Francisco might make you think you need the City to enjoy its creature comforts.  San Francisco's got it, but the price is steep. Instead check out some of our walkable neighborhoods in the East Bay. 934 Arlington Avenue in Berkeley (open Sunday 10/12/2014) offers a great WalkScore and a spectacular view.  With fabulous neighborhood shops, nearby amenities and better affordability, you can live like a San Franciscan while spending like a Berkeleyite.

Grab a great cup of coffee at your favorite local shop and compare to 934 Arlington home values of $408 per square foot to San Francisco housing prices.  Don't dribble your coffee as your jaw drops, we think you will be delighted and amazed.

Tuesday, May 6, 2014

Slap a Sign Up and We Are Outta Here

Is there a real estate bubble in the East Bay?  If so, is it time to cash out?  If you want a one way ticket out of the Bay Area and you own your own home, the numbers seem to be in your favor. In April, 49 homes closed escrow in Berkeley at an average of 120% of their asking price.  The upside potential is even more amazing as three lucky sellers closed at more than 150% of their asking.  Back in March, we saw an example as high as 167%. Apparently, it pays to have the great home everyone wants, as higher quantities of multiple offers drive the highest overbids.  Luck only works as an exit plan unfortunately, because jumping into the bidding wars as a buyer isn’t as opportune. (See Priced out of my own ‘million dollar’ Berkeley block by Reichi Lee as published by BerkeleySide.)  This may be one of the main reasons for sale signs aren’t up in more front yards.  If you cash out now, it may look daunting to try to buy back in.
Back to the bubbly: I hate to label the current housing boom as a “bubble” mainly because of the fear the word provokes in an area where many are still nursing wounds left by the recession.  We need a less scary word, maybe just “bubble-lite.”  True, the market is soaring in much the same pattern as once again our housing supply can’t meet the current demand.  But this market is somewhat different. It is expected to have a softer deflation, because this time homeowners have more skin in the game in the form of actual equity in their homes.  This is due to two factors.  First, new lending restrictions are implemented which often necessitate higher down payments in order to qualify for a home loan.  The second reason is a little less obvious to those outside the feeding frenzy and is a direct result of the psychology associated with multiple offer situations:  You know the expression, “a bird in the hand is worth two in the bush.”  In this case, the birds are Benjamins.  Given the choice between multitudes of buyers, many sellers feel most comfortable with the buyer who has the most Benjamins in hand. In most cases all cash offers, or offers with high down payments, stand a better chance at being accepted.  As a result, homes still sell high, but with more actual pennies in place.   In 2013, 52.2% of buyers had down payments greater than 20%, and nearly 30% were all cash buyers. These two equity elevators will work like a buffer against the fear of future short sales and foreclosures.
Timing is everything and more housing inventory has come on the market this week, easing some of the market zealousness experienced in April.  Such weekly shifts are not predictors as small blips in inventory will not adequately meet demand and level the market place.  East Bay housing demand may be on the rise.  Before this bubble can pop, we have another market propellant unique to our neck of the woods (or seeping in our direction out of Silicon Valley).  Facebook was the first to test the waters of the post-recession economy by going public.  Despite a bumpy start, they paved the way and now it seems many California technology companies are ripe for going public. According to the founder of several tech companies, Marcus Nelson, “Should the bull market come out to play, expect a successful Twitter IPO to kick off a domino effect for other Silicon Valley tech companies – and well beyond.” As companies go public and stock options are realized, this could inject more fuel to the equity fire.  These stockholders may look to the city first, but often come across the Bay to find relatively affordable real estate.  Prepare to see more cash offers in our future.
Now, if we only had more homes to sell….

Friday, April 18, 2014

Open Letter to East Bay Sellers: “Please, Raise Your List Price”

Yep, I said raise your list price.  Some real estate professionals can’t believe that these words would come out of another agent’s mouth.  The more common challenge is getting a reasonable and marketable list price from an emotionally attached Seller.  (Everyone tends to think their home is the best on the block, myself included.) 

Enter the East Bay Real Estate Market, where low inventory translates to multiple offers.  Some say you can’t price a home too low in this hot market as the price will self-correct upwards and then some when the bidding war happen.  This is not an absolute truth.  Seeing multiple offers all around has us thinking that Sellers may in fact need a new strategy.  Here are our reasons for asking Sellers to increase their price:

1.       It’s Worth It! Not to overstate the obvious, but we are in a booming market.  We started talking to some of you a while ago when you first thought about putting your home on the market. While you may have had a price in mind based on that initial conversation, it is time to revisit the recommended sale price. Your home is likely worth more.

2.       You Might Be Missing the Mark. Too low a list price may put the property below the range of its targeted buyer.  If you expect a million dollars for your home, you can’t sell it at a bargain basement price.  Buyers who are qualified to spend $1,000,000 may start looking a bit lower--but not substantially so.  After all, they want a million dollar house, so why should they start looking at homes in the $700s?  If you list your million dollar home at $700,000, and the buyers looking at it can only afford $800,000, you may miss your audience.  To increase your odds for success, price your home within 10% of your targeted sales price.

3.       Bidding Wars Don’t Always Bring the Top Price. Everyone in this office has heard stories of the houses that sold for two times the asking price.  These are specific anomalies that, because of their freakish nature, gain the most buzz.  They are not the rule.  In markets where homes sell repeatedly with multiple offers, more predictable patterns begin to emerge.  A general pattern might be noticed, for example, whereby a home with three offers may go over asking by 10% or so, whereas a home with 14 offers may go over asking by 30% or more.  These overbids tend to cap out by about 40% when buyers begin to step down from the competition based on affordability or perception of a property’s value.  Here’s how the numbers could affect you: if you price a home worth $600,000 at $400,000, you may get lots of offers based on the unbelievably low price (not surprisingly, many bargain hunters are included in this group).  However, those offers may top out at about $560,000--40% over--even in the spontaneous bidding war. It may be worthwhile to instead start at an asking price of $550,000, get a few offers, and eventually sell at $605,000 (while only 10% over, still a higher net than the previous example) . This is tricky because most Sellers still see the sheer numbers of offers as proof of success—and not the potential net. 

4.       Breaking Hearts Isn’t Easy.  It is often fun to put on a good show and charm dozens of buyers into writing fabulous offers.  It feels especially nice to field all the love letters that come in telling you that your home is the only one on the planet that could house their future memories.  But there is an emotional letdown that happens after the 24 offers are heard.  The heartache comes when you have to tell 23 buyers—all of whom fell madly in love your home—“we’re just not that in to you.”   Heartbroken buyers get fed up watching the homes they like close at 30% or more over the price they saw at the open house.  This frustration, if left unchecked, actually begins to force Buyers out of the market and onto the sidelines.  This could end up tamping your ability to receive offers.  We have gotten calls from clients who won’t make an offer while under fierce competition from other buyers.

5.       Tell Me What You Want, What You Really, Really Want… Perhaps the best argument for a higher price is based on your own instinct and the price you are ultimately willing to accept.  This determination should come after a frank and realistic conversation with your agent about where the value truly lies.  Assume you only get one offer (and it does occasionally happen in the East Bay), can you take it?  If the answer is a quick “no,” your price is not realistic and should be revisited.

Price is the most important marketing decision related to the successful sale of your home.  Deriving the right listing price is complex.  If you would like to speak to an expert about the best strategy to maximize your home’s value, please reach out to one of our experienced agents.  

Thursday, March 27, 2014

Home Buyer Tip: Why Building Permits Matter

Having spaces properly permitted is ideal.  However, it is not uncommon in our area of older housing stock to come across spaces that have not been permitted.  When we evaluate non-permitted space these are our concerns:
  1. Market Value.  Often, even non-permitted spaces still have an inherent "use" value.  The value of the space in our area is usually related directly to the quality of the improvement and usefulness of its purpose.  Because of our competitive market (and frequency when non-permitted spaces sell at high value), it is hard to pinpoint any direct correlation between  a lack of permit and decrease in value. 
  2. Appraisal Value.  Conversely, we have seen non-permitted space effect the value in the eyes of a lender.  Some bank appraisers will not give ANY worth to a non-permitted space.  If the banks appraisal comes in lower than needed to achieve the desired loan amount, this is a risk for the buyer.  The buyer may not be able to qualify for the purchase.  Buyers should protect themselves with a loan and appraisal contingency.
  3. Potential Future Liability.  Some jurisdictions have taken a fairly easy going stance regarding existing spaces.  However, if you ever want to improve the space by adding plumbing or electricity, it may be necessary to bring the entire space up to code and pay for permits in order to permit your improvements.  Also, some cities have been aggressively pursuing code violations- via dive-bys, trolling through the Internet and showing up at open houses.  This has been met with some pushback in these communities.  This is a potential risk for any of the areas we sell in should the local jurisdictions decide it is worth a little bad PR to seek the revenue such violations could bring into the city coffers.
  4. Lack of Oversight.  Finally, having proper permits means that the space was inspected and meets the standards of the codes current at the time of the inspection.  Without permits, this code check did not take place.  Even with a good inspector, there may be defects that cannot be seen because they are hidden behind drywall or under floor coverings. 

Wednesday, June 26, 2013

Boosting Valuations When it Comes to Selling

On Thursday, Bloomberg’s online news service confirmed what we had been hearing in more general terms: “Sales of previously owned U.S. homes climbed more than forecast in May…and prices jumped, indicating more progress for residential real estate.” Agents here in Berkeley would also not have been surprised at the national surge in selling prices “by the most since October 2005”. If you were already inclined to sell your own Bay Area home, it looks more and more as if this summer will be a propitious time to jump on the opportunity. 

As Realtors gear up to maximize the market’s improvement, homeowners are also weighing some of the more popular alternatives for boosting valuations when it comes to selling — 
  • Prospective homebuyers are increasingly energy savvy, so when new appliances need to be updated prior to sale, the more energy-efficient they are, the more worth highlighting they will be. Us "Green-Minded" real estate agents know how to emphasize a property’s ‘green’ attributes.  
  • If you have an attic or a basement that is currently serving little purpose, conversion can pay off. Basements are often the more affordable option since they call for little structural remodeling. Conversions can be into a games room, office, or utility area. Attics are often best converted to bedrooms or office space (or at least staged to suggest the possibility
  • Landscaping including features like decks can be a huge selling point. If you are prepared to engage in a little DIY, adding a deck can be among the most cost-effective of improvements. According to HGTV, the cost of a professionally built deck starts at about $15 per square foot, with more elaborate installations featuring costly hardwoods or composite materials running closer to $35.  

Even if you do not intend to sell, a little extra money invested in your home may be a dollar-wise idea. Thoughtful investments can enrich your own living experience AND attract higher prices when the time comes to move on. If you’re looking for a real estate agent call me today to go over other improvement ideas.

By Gina Odom, Realtor : 415.307.1423

Monday, April 8, 2013

Planning for a Panic-Free "Relocating Moment."

One element that needs careful attention is the people part. It’s too easy to lose touch with those who relocating timetable. With a little preparation and imagination, it’s possible to turn events like garage sales and going-away parties into really fun celebrations.  I had a friend who hosted their going away party with a garage sale. She was able to make a few extra bucks as well as saying goodbye to her loved ones.

People are important in your life, so decide early how to announce to family and friends your
Another good idea is to assemble key belongings in a box that will accompany you: important documents like passports and birth certificates, jewelry, or other prized possessions. 

Most household moving veterans agree that the single most vital step is securing a dependable moving company. Price is important — but so is hiring a group that will guard your belongings safely during your relocation. Scrupulous interviewing and checking out the reputation of mover candidates will more than pay off in reduced stress come moving day. And even if you are an eternal optimist, get adequate insurance: relocating does inevitably involve unforeseeable risk.

‘The moment’ when your relocating is in full swing can be one when you are able to enjoy the anticipation of a new and exciting chapter in your household’s history. If you have sold your East Bay home already – congrats! And if you are just beginning the process, do give me a call — I’d love to put my resources to work for you!   

written by Gina Odom, Realtor

Sunday, March 17, 2013

St. Patrick's Day On Broadway with St. Martin de Porres School

“Education is the most powerful weapon which you can use to change the world.”
–Nelson Mandela

Krista Miller and Tracy Sichterman plot their winning bids at St. Martin de Porres School's Fundraiser as Father Aidan McAleenan, Steve Burke, and Frederica (Flicka!) von Stade Gorman lead the live auction.

Nobody on the Berkeley Hills Realty team was surprised to get the invitation to St. Martin de Porres School’s fundraiser “St. Patrick’s Day on Broadway.” When agent Janesta Downey  joined Berkeley Hills Realty she warned us: “You’ll hear a lot about this school from me.”

Janesta’s relationship with St. Martin de Porres School began when she found “the perfect home for a group of nuns in West Oakland… As a result of the friendships formed during that transaction she became fundraiser, board member, and general cheerleader for St. Martin de Porres.”

Tracy Sichterman, Krista Miller, and Janesta Downey represented Berkeley Hills Realty at the event. The representatives suffered deeply— braving Flood Mansion to endure gourmet buffet stations, fine wines, and the presence and performance of mezzo-soprano Frederica von Stade. Anything for the kids.  

Why Flood Mansion? “In the aftermath of the Great Quake of 1906, Maud Flood’s monumental home on Nob Hill was destroyed by fire. …James Leary Flood reassured his wife, saying, 'I will build you a house of marble on a hill of granite.'" He then built Flood Mansion. St. Martin de Porres School aims to build that kind of firm foundation-- in the form of a quality education-- for the children of downtown Oakland, West Oakland, and Northwest Oakland. "The students who attend St. Martin de Porres School generally live along the San Pablo Avenue corridor from the Port of Oakland on the West to the Southern border of Berkeley."

Visit The St. Martin de Porres School website for more information about the school. Even if you missed the fundraiser this year, you can still donate to the school here.

Monday, March 11, 2013

Friday Nights at Oakland Museum of California


Oakland Museum of California has created a perfect, family-friendly Friday night event.

You can choose which part of the event to participate in based on your own mood and whims:

Feeling creative? Join the Customizer-in-Residence Open Studio series.

Hungry? Visit the Off the Grid gourmet food trucks. We tried empanadas from the El Porteño food truck. Impossibly, these empanadas taste even better than they smell.

Need a drink? Visit the cash bar for a selection of wine, beer, and a few mixed drinks.

Wanna dance? Each Friday features a different musician and/or dance lesson. Friday, March 8, featured salsa lessons from Serena Wong of Salsa Vale Todo, DJ JuanLove, and live music from Edgardo Cambón with his 5tet LatTiDo. We missed the dance lessons (see empanadas) so we brought our own shameless brand of enthusiastic non-salsa to the dance floor.

Wanna laugh? Sit on the steps and watch people non-salsa.

Wanna see some art? The museum exhibits are half-off during the event.

This fun, family-friendly event happens every Friday.
Visit Friday Nights @ OMCA website for more information and go check it out!

Saturday, March 9, 2013

Berkeley Hills Realty Gets Colorful at The Color Run!

from l to r: Cathie Kosel (standing in for Nancy Mueller),
Krista Miller, Tracy Sichterman, Andrew Kosel,
Monica Alicia Bland, Negar Souza, Carina Stanley,
Rebecca Nemeth, Tom Knight
Berkeley Hills Realty organized “Team Kindness” for this month's San Francisco Color Run. (It was Krista’s idea!)

How to do The Color Run in  three steps:
1. Put on white t-shirts and start to run (or walk) a 5K.
2. Laugh through the color stations at each kilometer while getting doused with color.
3. Dance Dance DANCE! Shake your colorful self at the finish festival and concert.
(Optional/mandatory) Go to restaurant in the Bay Area without changing your clothes. 
Our choice: Montero’s on Solano.

What we know now that we didn’t know then: Go early. The traffic on the way is fierce but the parking lots are well-staffed and organized once you arrive.

We had a great time getting colorful!

To see more photos of the event, visit the Berkeley Hills Realty Facebook page.

A team that plays together stays together. When you are ready to find the perfect home base or put your home on the market, call us at Berkeley Hills Realty. We will “color outside the lines” and work as team to make sure we take care of your needs.

Monday, March 4, 2013

Berkeley Home Sales Prospects: Anything But “Calm”!

Last weekEast Bay home sellers saw more than the usual number of reasons to look forward to this spring's home selling season. It looked like the opposite of the lengthy real estate “Perfect Storm” that caused free-fall across the national landscape. 

Signs pointed to the possibility that we may be headed into the opposite market conditions. Webster’s Dictionary says the opposite of ‘storm’ is ‘calm’ – but I don’t think you would call Berkeley home sales outlook a “Perfect Calm.”  Far from it!  

Some of the signs:
  • - Falling Inventory. Per the NAR’s Existing Home Sales Report, there’s a nation-wide shortage of total inventory. By the end of January, it had fallen another 4.9%: lowest in seven years. Raw unsold inventory hasn’t been this low in 14 years!
  • - Rising Demand. Per last week’s National Association of Home Builders’ News and Alerts bulletin, “housing demand continues to return.”  NAR Chief Economist Lawrence Yun, pointing to buyer traffic that is up 40% over a year ago, states flatly, “We’ve transitioned into a seller’s market in much of the country.”
  • - Buyer Attitude. Also last week, the Conference Board’s Consumer Confidence Index showed a rebound from January. The ‘Present Situation’ index rose sharply (from 56.2 to 63.3). This remains the only less-than-stellar point of contention, I think one area could be a tipoff to gathering strength: the proportion of those expecting their income to rise is now growing, those expecting the opposite, falling.
If this spring turns out to be the opposite of a Perfect Storm for Berkeley home sales, will conditions improve further? Should sellers wait? The falling inventory measure might suggest otherwise. If the NAR’s appraisal is correct, now that these trends are consolidating, “…it would seem likely more inventory would come to market.”
written by Gina Odom, Realtor