|Happy New Year!|
Please see our latest market update documenting various aspects of the turn around.
I'm happy to be your resource for any real estate related business and questions
you may have in 2013 and appreciate your ongoing support through referrals!
|East Bay: Q4 Results|
|Buyers had a limited number of homes to choose from in the third quarter of 2012, and by the fourth quarter the market got even tighter. Nearly 75 percent of sales in our Montclair and Berkeley
offices involved multiple offers, and buyers had to move quickly.|
A balanced real estate market has a six-month supply of inventory available, but the supply in the East Bay fell to 1.2 months in the third quarter and ended the year at barely half a month. November and
December typically see a slowdown in sales as the holidays approach, but that wasn’t the case this year. Sales in most neighborhoods in the East Bay remained strong throughout the quarter, and buyer demand
helped drive home prices to their highest level since 2007.
The East Bay is a popular destination for buyers priced out of the San Francisco market, but first-time buyers were at a competitive disadvantage when bidding against investors and all-cash buyers.
Looking Forward: Upward pressure on prices should encourage more sellers to put their properties on the market and ease the housing bottleneck. Buyers will be ready, especially with interest rates
expected to remain at record lows through much of 2013 and prices still below their peak.
Defining the East Bay: Our real estate markets in the East Bay region include Oakland ZIP codes 94602, 94609, 94610, 94611, 94618, 94619, and 94705; Albany; Berkeley; El Cerrito; Kensington; and Piedmont.
Sales data in the charts below includes single-family homes in these communities.
|2012 Set Records — Here's to 2013!|
|2012 was a blistering year for San Francisco Bay Area residential real estate, as most of our regions tallied their highest number of home sales since 2005. Back in Q2 we said jobs would drive
our housing markets, and we hit the nail on the head. Exceptional job growth in San Mateo, San Francisco, and Marin counties spurred home-buying demand at a pace not seen in other U.S. markets.|
Due to a limited inventory of homes for sale, we also got the most interesting dynamic of our record-setting year: the return of “bidding wars”, or multiple offers, in most markets at price points up
to $1.5 million.
In 2013 we predict more robust demand, as job growth expands into other Bay Area counties. Continuing constrained inventory will create price appreciation for the first time since 2007. And if the
appreciation continues through summer '13, we will see “move-up buyers” re-enter the hunt for higher-end housing (over $1.5 million) in late August and early September.
These buyers, who have been waiting patiently for their home values to rise so they can trade up to larger residences or better neighborhoods, will contribute to additional inventory in the mid-tier
markets and improved demand in the higher end.
Overall, we have a very positive outlook for Bay Area residential real estate in 2013. Whether you're looking to buy or sell, remember that real estate is hyperlocal — and your best ally is a real
estate professional who can provide you with exceptional local insight, knowledge, advice, and decision support.
Happy New Year!
|Luxury Home Buyers Changing Their Ways|
|Goodbye, bling. Hello, quality and value.
That’s the new approach luxury home buyers are adopting in the San Francisco Bay Area, according to Alf Nucifora, chairman and founder of the Luxury Marketing Council of San Francisco.
He says lessons learned from the recession, baby-boom buyers eyeing legacy purchases, and young tech turks who value function over form are fueling the trend.
|“The recession taught us that we can live without unnecessary extravagances,” says Nucifora. “And that has led to a systematic shift in the way people buy. We are less concerned with showing
it on the outside but more concerned with enjoying it on the inside.”|
In addition, so-called baby boomers (born 1946 through 1964) now make up a significant portion of the luxury-buyer market, and they are shifting from making to preserving wealth.
“We (boomers) played and we made and we splurged, but we don’t need the fancy cars, the watches, or the showplace home anymore,” he says. “Now it’s the notion of bespoke, of things crafted
with an eye to enduring value. We have kids and grandkids and want a legacy to be handed off to them.”
The young dot-com and IPO millionaires might not be thinking about their future family bequests, but many also eschew frippery for functionality. They choose jeans and T-shirts over Brioni suits and sink
their money instead into elite experiences and artisanal comfort. They may not have the biggest house on the block, but there’s a La Cornue range in the kitchen and a custom Jacuzzi in the backyard.
What this all translates to is a shift away from showy excess and toward a search for quality, value, and connoisseurship, especially in the $2 to $10 million range, says Nucifora. It’s the consumption of
wealth on a quiet, introspective basis, as opposed to ostentatious display.
|“Buyers are now more focused on the view, the privacy, how good the kitchen really is -- things that go into the enjoyment of the family experience as opposed to letting me show my neighbors how
big and wealthy I am,” he says.
While luxury buyers still spend plenty of money, it’s now more often on things like interior remodels, home theaters, expensive custom cabinetry, or top-of-the-line appliances – items that create a high-end
quality of life experience but are invisible to anyone on the outside.
|And even the most well-heeled buyers are looking for bargains.|
“They can easily afford to pay above listing price, but they want to get a deal because it affirms their sense of self, their smartness,” says Nucifora.
What does this mean for 2013? Expect to see these trends continue, he says. Sellers in these price ranges would be smart to invest in staging, because today’s value-savvy luxury buyers are willing to shell out for
the right experience – and a luxury residence with empty rooms or dated furnishings doesn’t fit that bill.
“In buying real estate, it’s that visceral reaction when I walk in,” Nucifora says. And, he adds, bad presentation is obvious: “When you walk into some of them it’s like entering an abattoir.”
Pie-in-the-sky pricing schemes will also be a thing of the past, even as home values rebound; buyers in the high-end market will continue to look for deals and choose substance over show-off style. The
cachet of spending piles of money on a pile of bricks has worn somewhat thin, he says.
“The recession taught us all that we can live without unnecessary extravagances, that we should look for quality, and really ask ourselves whether that purchase is absolutely necessary,” he says. “And most
of us found out we can live without it.”
|JUST SOLD- multiple offers
|4145 Randolph Avenue, Glenview|
|Listed at $725,000-Sold at $900,000|
|© Pacific Union International, Inc. 2013. CA DRE #01350486|