How Was the Market in 2014

How Was the Market in 2014?                                           

By Cary Amo, Realtor®, (925) 818-0880

CALBre #01104264

As a long time professional Realtor®, I often hear the question “How’s the Market”.

Now that we are almost through the first month of 2015, I will answer this question (at least for Central Contra Costa County) – How did housing prices fare during 2014.  To accurately assess this, I compared the “Average Sales Price” of detached homes sold in 2013 compared with 2014, by city in Central Contra Costa.  The only exception to this is Concord which I split into two regions: Central to Southeast Concord and Central to North Concord.  I did this because Concord is a very large city in Contra Costa and the average sale price for each region is more accurately reflected.  In terms of appreciation, the top 3 cities in Central Contra Costa that saw the most appreciation is 2014 were:

  • Martinez – North of Highway 4 – 21%
  • Martinez – South of Highway 4 – 14%
  • Pleasant Hill – 13.9%

Here’s how all of Central Contra Costa County fared in 2014 in terms of Average Sale Price and the per cent of increase from 2013.

Average sale price of Detached Homes in 2014, Central Contra Costa:

  • Martinez – North of Highway 4 – $445,331 ($366,644 in 2013 – Up 21%)
  • Alamo – $1,586,948 ($1,382,817 in 2013 – Up 14.7%)
  • Martinez – South of Highway 4 – $600,242 ($526,320 in 2013 – Up 14%)
  • Pleasant Hill – $654,974 ($574,952 in 2013 – Up 13.9%)
  • Danville – $1,184,104 ($1,047,875 in 2013 – Up 13%)
  • Central – North Concord – $423,657 ($378,774  in 2013 – Up 11.8%)
  • Martinez – South of Highway 4 – $600,242 ($526,320 in 2013 – Up 14%)
  • Walnut Creek – $943,361 ($845,294 in 2013 –Up 11.6% )
  • Orinda – $1,377,241 ($1,237,029 in 2013 – Up 11.3%)
  • Central-Southeast Concord – $564,789 ($508,372 in 2013 – Up 11%)
  • San Ramon – $959,476 ($884,443 in 2013 – Up 8.4%)
  • Lafayette – $1,350,075 ($1,248,829 in 2013 – Up 8.1%)
  • Moraga – $1,205,576 ($1,135,674 in 2013 – Up 6.2%)

Another aspect to the market is the belief by some that there is still this “Shadow Inventory” of distressed homes in the form of Short Sales or Bank Owned properties also known as REO’s (Real Estate Owned by banks or financial institutions).  To dispel that notion, here are the percentages of “Distressed Properties” that sold in Central Contra Costa in 2014: 

Number of Short Sales and REO’s in 2014 & Per Cent of Total (detached homes)

  • Central – North Concord – 45 – 7.4%
  • Central – Southeast Concord – 22 – 5%
  • Martinez – North of Highway 4 – 27 – 10%
  • Martinez – South of Highway 4 – 8 – 7%
  • Pleasant Hill – 15 – 4.2%
  • Alamo – 6 – 2.5%
  • San Ramon – 16 – 2.2%
  • Moraga- 3 – 2%
  • Walnut Creek – 9 – 1.7%
  • Danville – 10 – 1.6%
  • Lafayette – 5 – 1.6%
  • Orinda – 3 – 1%

My Forecast for 2015:

Lastly, there are 3 primary factors that typically affect house; the economy, mortgage interest rates and housing inventory.  Everything I read about the national and local economy of the Bay Area is extremely positive.  Mortgage Interest rates have dropped below 4% for conforming loans (LT $417K).  Fannie Mae has just introduced a conventional loan with only 3% down.  The PMI (private mortgage insurance) for FHA loans has been reduced from 1.35% to .8% dramatically reducing that portion of an FHA borrower’s monthly payment.

And the last factor affecting my forecast is housing inventory.   The number of active homes for sale is extremely low (see Central Contra Costa below) in all Bay Area cities.

Buyer’s need an experienced realtor if they hope to succeed in buying a home in 2015.  Most homes will see multiple offers and overbidding much like we saw in 2013.  An example, y first condo listing of 2015 had 7 offers; 2 all cash.  Existing homeowners will likely see high single digit to low double digit appreciation, again in 2015.  If you’ve been thinking of selling, the time is RIGHT.

Number of Active Detached Homes as of 1/26/2015:

  • Danville – 45
  • Central – North Concord – 40
  • Alamo – 29
  • Walnut Creek – 28
  • Central – Southeast Concord – 27
  • San Ramon – 22
  • Pleasant Hill – 21
  • Orinda – 14
  • Lafayette – 13
  • Moraga – 5

Low housing inventory coupled with, again, GREAT Mortgage Interest Rates means get ready for another roller coaster ride in 2015.

 

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