First Quarter Sales – 2015 – What are Buyers to Do?

The first quarter of 2015 has come to an end and the real estate market is still sizzling like bacon on a hot grill.  Many buyers have gotten frustrated and dropped out of the market.   The numbers for Central Contra Costa below are not encouraging either.  In just 3 months, the average sales price has risen by an average of 3.4%.  The average sales price was flat for only 2 communities; Pleasant Hill and Moraga.  See the increases in average sale price below.

The bigger problem is that all of these communities, including the Oakland/Montclair hills have no more than 1 month’s inventory.  I’m also regularly seeing competitive bids with 6 to 10 offers.  I wrote an offer in the Oakland Hills last month on a property that was listed for $985K.  We wrote an offer for $1,185,000 or $200K over the asking price with NO CONTINGENCIES.  Luckily, the Listing Agent had provided a Home and Termite Inspection Report.  Our offer was #4 out of 8, price wise and the eventual selling price was $1,250,000 or $265K over asking.  Of the 42 sales in Montclair during Q1 2015, 36 were over the asking price by an average of $130K.  However, there were 8 sales that ranged from $200K to $425K over asking.  Clearly many of the frustrated San Francisco would-be buyers have moved to the Oakland Hills.

Even in the affluent communities of Lafayette and Orinda, average sale prices increased 4.5 to 5.4% to an average sale price of over $1.4MM.  This surpasses the 2005 through 2007 market when the average sale price for Orinda was $1.3MM and Lafayette was slightly lower at $1.29MM.  At this rate, average sale prices in many communities could appreciate from 10 to 15%.

While all of the above seems to encourage more prospective buyers to exit the market and WAIT for things to calm down,  I WARN YOU, prices may not calm down before they are significantly higher than today.  And that may price you out of the market all together.

Here are some suggestions for buyers

  1. Stay focused and DON’T TAKE A BREAK from searching and writing offers.
  2. If you only have 20% down, find a way to increase your down payment to 30% down (if you can). This will better position you to deal with appraisal issues should you win a bid.
  3. Get an appraisal before you submit your offer. This will cost buyers about $500, but it will better position them to know how much they may need to add to their down payment should the appraisal fall short of their offer price.
  4. Consider lowering the price of homes you’re searching.
  5. Be sure you’re working with a knowledgeable and experienced Realtor® who can effectively guide you through this process.

City                            Q1 2015                               YE 2014                Per Cent Change

                               Ave Sale Price                 Ave Sale Price

Lafayette                  $1,411,280                          $1,350,075                                4.5%

Orinda                      $1,410,023                         $1,337,241                                  5.4%

Moraga                     $1,195,451                          $1,205,576                                -.08%

S. Concord               $   597,076                         $   564,789                                  5.1%

N. Concord              $  445,752                          $   423,657                                  5.2%

Pleasant Hill           $   647,891                         $   654,974                                  -.01%

Walnut Creek         $   970,826                         $   943,361                                   2.9%

Alamo                      $1,680,121                          $1,586,948                                   5.9%

Danville                   $1,166,372                          $1,184,104                                    1.5%

San Ramon             $ 993,067                           $   959,476                                    3.5%

Oak/Montclair       $ 979,877                             $977,297                                Unchanged

 

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