How IS the Real Estate Market in Contra Costa?

I was at a dinner party on Christmas Eve when one of the guests asked me if the Real Estate Market had started to turn.  She was pleasantly surprised when I told her that our local market was “ON FIRE!”  I continued that as of April or May of this last year, the market took off like a ROCKET.  Multiple offers had again become the norm on any decent property, priced below $600k regardless of type of listing; Bank Owned (REO), Short Sale or a Regular Equity Sale.  In Danville or San Ramon, the price threshold was closer to $725K.

In Pleasant Hill, while I was preparing a new listing for sale (which took a couple of months) I began tracking all New and recently Pending Sales in Pleasant Hill.  When a home went Pending, I would call or email the listing agent and ask how many offers they had received.  I was pleased that virtually all of my fellow Realtors® were happy to share this with me.  With this data, I developed a spreadsheet so I could determine the range of offers (anywhere from 3 to 39), the average number of offers (which was 9, after a couple of months), and the average dollar amount over the asking price (about $36K) once the sale closed. 

I began sharing this spreadsheet with Open House Guests when I began marketing my Pleasant Hill listing.  I continued to capture this information for several months. Also, through my networking and working with buyers in Concord, Martinez,Walnut Creek and San Ramon, I discovered that the HOT MARKET wasn’t exclusive to Pleasant Hill.

I had my own experiences that demonstrated how strong our local market had become.  One offer that I wrote for a young, first time buyer couple had 27 offers.  The property was priced at $410K (a fair market value for this 3 bedrooms, 2 baths, 1500sfConcord home).  We bid $56K over the asking price.  My buyer’s were not even among the top 6 offers.  The property closed for $475K.

WHAT’S THE CAUSE FOR THIS HOT MARKET?  Well, the answer is as simple as   law of supply and demand.  The amount of housing inventory has been low all of 2012 starting about April.  This has been true for most Bay Area cities.  Interest rates continued to drop to levels not seen in over 50 years (conforming loans as low as 3.25%).  The combination of low interest rates and low inventory persisted through the end of the year.  Further, it is not expected to be much different in 2013.

As of this writing the number of active detached homes by city are:

 

Pleasant Hill                9                   Orinda                 15
Concord                    40                   Moraga                 4
Martinez                     22                   Alamo                24
Walnut Creek          35                    Danville            33
Lafayette                    15                    San Ramon      20

So hang on to your hats, long time homeowners.  2013 is going to be an interesting ride.  And all of you Buyers, don’t be discouraged.  There are still good reasons to BUY NOW.  I’ll address this in a future blog.

 

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