March 2020

Your Real Estate Expert for Berkeley and Beyond

  • Deep Market Knowledge
  • Analytical, Strategic, Creative
  • Honest, Adept, Direct

“Marilyn is exceptional. Her knowledge base, enthusiasm for her job, professional ethics, organization, sensitivity to our aesthetic requirements, loyalty and gentle perseverance set her apart.”

-- Bill and Carol Seidel

Marilyn Garcia, PhD

Marilyn Garcia, PhD Broker Associate, Realtor® CA DRE LICENSE #01355514

The Grubb Company 1656 Shattuck Avenue Berkeley, CA 94709

Direct: (510) 390-5406

THE OUTLOOK: North Berkeley, Winter 2019-2020 wrap-up

Let’s start with a look back over the previous year in North Berkeley real estate, and then take a quick look forward. Over the course of 2019, there were 89 active listings in North Berkeley, and 81 properties sold.  Both of these numbers are down from the previous year, when we had 101 active listings, and 92 sales.  Low inventory meant that there were multiple buyers interested in most properties, and 81% of the sales were for more than list price.  Sale price averaged 26% above list price for those properties that went over. The median sale price for 2019 [...]

By |March 14th, 2020|Data, Housing Market, North Berkeley, Real Estate Trends|

THE OUTLOOK: Berkeley Hills, Winter 2019-20 wrap-up

In Berkeley hills, there were 195 active listings over the course of 2019, and 161 properties sold.  81% of the sales were for more than list price, with multiple buyers interested in most properties, and sale price averaged 20% above list price for those properties that went over. The median sale price for 2019 was $1,425,000, which is up 3% from the previous year.  The average sold price per square foot was also up, by 3% from the previous year at $747. Most properties sold quickly, in an average of 20 days on the market. Fourteen properties (8% of the [...]

By |March 14th, 2020|Berkeley Hills, Data, Housing Market, Real Estate Trends|

REAL ESTATE ANSWERS: Why should you pull a permit for work done on your home?

Why should you consider pulling a permit for work done on your home? The #1 reason you should get a permit if you’re having work done on your home that requires it is the obvious one: it’s required by law, and you can have problems with the City if they discover you don’t have a permit, either as the work is being done, or after the fact.  That said, it’s definitely the case that many homes in our area have work that was done without permits.  Homeowners choose to skip permits for a variety of reasons, including the cost of [...]

Home Loans, Interest rates, and Real Estate Newsletters

HOME LOANS AND INTEREST RATES x Interest rates on home loans have been very low lately!   If your interest rate is close to, or above, 4%, it could be worth your while to contact your favorite loan person and see if you could benefit from refinancing your loan. x   (See the update below.) Also, the limit on conforming loans (which can be sold to Fannie Mae and Freddie Mac) in our area was increased for 2020 to $765,600, up from $726,525 last year. Loans below that limit often have lower interest rates than those above. UPDATE, March 20, 2020 While [...]

By |March 14th, 2020|Berkeley, Data, General Interest, Resources|

THE OUTLOOK: North Berkeley, Winter 2019-2020 wrap-up

Let’s start with a look back over the previous year in North Berkeley real estate, and then take a quick look forward.

Over the course of 2019, there were 89 active listings in North Berkeley, and 81 properties sold.  Both of these numbers are down from the previous year, when we had 101 active listings, and 92 sales.  Low inventory meant that there were multiple buyers interested in most properties, and 81% of the sales were for more than list price.  Sale price averaged 26% above list price for those properties that went over.

The median sale price for 2019 was $1,350,000 in North Berkeley, which is up 2% from the previous year.  The average sold price per square foot was up 4% from the previous year at $874.

Most properties sold quickly, in an average of 21 days on the market. Twelve properties (15% of the total) did need to adjust their prices before selling—8 properties had price reductions, and 4 properties had price increases.  Remember that in our market, a price change in either direction is generally a signal that a property did not get the initial interest that was expected.  In 2018, 9 properties had price changes, or 10% of the total sales.

All of these numbers feel consistent with where we seem to be in the real estate market cycle. I think we’re right around the peak, so we’re seeing relatively modest price increases and a few more properties not doing as well as expected.

For the winter quarter just past (December through February), there were only 15 active listings, and 10 sales.  2 properties had price changes, and the median sold price was $1,387,500, up 4% from the fall quarter. The average sold price per square foot was $830 for the winter, which is down 2% from the fall, but up 5% from the previous winter.

So far in 2020, the buyers have been out in droves, looking at the very few houses on the market.  Will the coronavirus slow things down going forward?  Low interest rates will help, but uncertainty about the economy, and a focus on staying home rather than going to public gatherings (like open houses) could affect buyers’ plans. We’ll have to wait and see how it all develops.

UPDATE, March 20, 2020

Well, since I wrote the post above, things have definitely changed.   We now have a statewide Shelter-In-Place order, which has slowed (but surprisingly, not stopped) activity in the real estate market.  Open houses are canceled, but there are still properties on the market, being shown, and sold, with photos and virtual tours.  I’ve been surprised at how many offers properties have been getting under these extraordinary and difficult circumstances.

Also of note:  while the Fed has cut interest rates multiple times, and the interest rate on 10-year Treasury notes (which is typically the rate most tied to rates on home loans) has fallen substantially since the beginning of the year, home loan rates have actually risen.  Lenders reportedly were already struggling to keep up with refinance requests, and these difficulties cannot have been helped by the Shelter-in-Place.

 

THE OUTLOOK: Berkeley Hills, Winter 2019-20 wrap-up

In Berkeley hills, there were 195 active listings over the course of 2019, and 161 properties sold.  81% of the sales were for more than list price, with multiple buyers interested in most properties, and sale price averaged 20% above list price for those properties that went over.

The median sale price for 2019 was $1,425,000, which is up 3% from the previous year.  The average sold price per square foot was also up, by 3% from the previous year at $747.

Most properties sold quickly, in an average of 20 days on the market. Fourteen properties (8% of the total) did need to adjust their prices before selling—9 properties had price reductions, and 5 properties had price increases.  (Remember that in our market, a price change in either direction is generally a signal that a property did not get the initial interest that was expected.)

All of these numbers feel very consistent with where we seem to be in the real estate market cycle. I think we’re right around the peak, so we’re seeing relatively modest price increases and a few properties not doing as well as expected.

For the winter quarter just past (December through February), there were 37 active listings, and 30 sales.  5 properties had price changes, and the median sold price was $1,410,000, which is about the same as in the fall, but 10% higher than the previous winter. The average sold price per square foot was $723 over the winter, down 1% from the fall, and also down 8% from winter 2018.

So far in 2020, the dry sunny weather has the buyers out in droves, looking at the very few houses on the market.  Will the coronavirus slow things down going forward?  Low interest rates will help, but uncertainty about the economy, and a focus on staying home rather than going to public gatherings (like open houses) could affect buyers’ plans. We’ll have to wait and see how it all develops.

UPDATE, March 20, 2020

Since I wrote the post above, things have definitely changed.   We now have a statewide Shelter-In-Place order, which has slowed (but surprisingly, not stopped) activity in the real estate market.  Open houses are canceled, but there are still properties on the market, being shown, and sold, with photos and virtual tours.  I’ve been surprised at how many offers properties have been getting under these extraordinary and difficult circumstances.

Also of note:  while the Fed has cut interest rates multiple times, and the interest rate on 10-year Treasury notes (which is typically the rate most tied to rates on home loans) has fallen substantially since the beginning of the year, home loan rates have actually risen.  Lenders reportedly were already struggling to keep up with refinance requests, and these difficulties cannot have been helped by the Shelter-in-Place.

REAL ESTATE ANSWERS: Why should you pull a permit for work done on your home?

Why should you consider pulling a permit for work done on your home?

The #1 reason you should get a permit if you’re having work done on your home that requires it is the obvious one: it’s required by law, and you can have problems with the City if they discover you don’t have a permit, either as the work is being done, or after the fact.  That said, it’s definitely the case that many homes in our area have work that was done without permits.  Homeowners choose to skip permits for a variety of reasons, including the cost of a permit, the additional property taxes that might be triggered, the possibility that the work might not be allowed by the city for zoning or code reasons, etc..

Here are the top three reasons to consider getting a permit, though, beyond just that you’re supposed to do it:

(1) It’s good to have an external check on the work being done.  Note that having a permit and the related inspections is not a guarantee that everything is done correctly, but at least someone with some knowledge is looking things over.

(2) If you’re adding square footage, and/or bedrooms and baths, the new space won’t have as much value in a sale if it is not permitted.  An appraiser looking at a property doesn’t give full value to space if it’s not included in the public record and you can’t show that it was added with permits.  Likewise, buyers may not value the space as highly because of potential issues with the appraisal, and because they may be uncertain about the quality of the work done.

(3) A permit sets the clock for the building code when the work is done.  Suppose you add a bathroom without a permit, and the city discovers this at some later date.  Possible outcomes could be that they require that the bathroom be removed, or that the work be inspected and brought up to current code and requirements.  Even if the work was done really well, and complied with all building codes and zoning requirements at the time it was completed, those codes and requirements may have changed, and past work without a permit is not “grandfathered in” (i.e. allowed to stay because it conformed with past regulations).  And, even if the codes or zoning have not changed, you still might be required to open up walls and undo things so that the underlying work can be inspected.

To permit or not to permit?  I leave you to decide.  One last thought though.  If you are having work done with a permit, be sure to follow up with your contractor, and get a copy of the final inspection sign-off after the work is done.  When I look at the online permit record for a particular property, I often see records for permits that were pulled, but never finaled.  Sometimes the work was not completed, but many other times, the final city inspection was never done, or the city’s database doesn’t show that final inspection.  By getting a copy of the final sign-off from your contractor, you know that the final inspection was done and passed, and you can prove it if something gets lost in the city records.

Home Loans, Interest rates, and Real Estate Newsletters

HOME LOANS AND INTEREST RATES

x Interest rates on home loans have been very low lately!   If your interest rate is close to, or above, 4%, it could be worth your while to contact your favorite loan person and see if you could benefit from refinancing your loan. x   (See the update below.)

Also, the limit on conforming loans (which can be sold to Fannie Mae and Freddie Mac) in our area was increased for 2020 to $765,600, up from $726,525 last year. Loans below that limit often have lower interest rates than those above.

UPDATE, March 20, 2020

While the Fed has cut interest rates multiple times, and the interest rate on 10-year Treasury notes (which is typically the rate most tied to rates on home loans) has fallen substantially since the beginning of the year, home loan rates have actually risen.  Lenders reportedly were already struggling to keep up with refinance requests, and these difficulties cannot have been helped by the Shelter-in-Place.   I suspect rates will come down later in the year, but for now, they’re on the high side compared to both recent history, and underlying factors.

In the news:  (This is a big one for everyone who has been worried about making ends meet during these challenging times!  Fingers crossed that this actually is a readily accessible option…)   If you have a conforming loan, guaranteed by Fannie Mae or Freddie Mac,  the government, in response to the pandemic, has said that you should be eligible to have your mortgage payments reduced or suspended for up to 12 months.  For more information, see https://www.npr.org/2020/03/19/818343720/homeowners-hurt-financially-by-the-coronavirus-may-get-a-mortgage-break

 

ON A SEPARATE NOTE…

There are a lot of real estate newsletters (electronic and printed) out there, but did you know that most of them are produced by an outside party, with a more regional focus so that they can be more broadly used?

I’ve been writing the Berkeley Hills Report (myself) now for 13 years.  I create and review the data so that I can focus on our immediate area and get a deep sense of what’s happening in the market. (My PhD is in economics, so this sort of analysis is right up my alley.)  I write this newsletter so I can share this information with you, and at the same time give you a good sense of who I am and what I bring to the table.  I hope you find it useful!

By |March 14th, 2020|Categories: Berkeley, Data, General Interest, Resources|Tags: , , , |

Your Real Estate Expert for Berkeley and Beyond

  • Deep Market Knowledge
  • Analytical, Strategic, Creative
  • Honest, Adept, Direct

“Marilyn is exceptional. Her knowledge base, enthusiasm for her job, professional ethics, organization, sensitivity to our aesthetic requirements, loyalty and gentle perseverance set her apart.”

-- Bill and Carol Seidel

Marilyn Garcia, PhD

Marilyn Garcia, PhD Broker Associate, Realtor® CA DRE LICENSE #01355514

The Grubb Company 1656 Shattuck Avenue Berkeley, CA 94709

Direct: (510) 390-5406

Subscribe to the Berkeley Report!

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