Summer 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: Berkeley (North & Hills), Summer 2020 wrap-up

Between the pandemic, the wildfires, and the blanket of smoke we’ve had to live with lately, one would think that the local real estate market would have gone into hibernation, but this has not been the case.  The pandemic has caused many people to re-evaluate where they want to live.  We’ve been spending much more time in our homes— for work, for school, for meals, for entertainment, for exercise, for leisure— so having the right indoor and outdoor spaces for those activities is more important than ever. Many people working from home are moving to take advantage of lower real [...]

REAL ESTATE ANSWERS: Why (and how) do so many local sellers spend so much money getting their homes ready for sale?

Why (and how) do so many local sellers spend so much money getting their homes ready for sale? Sellers in our area routinely spend tens of thousands of dollars on work and staging in preparation for putting their home on the market. (The amount obviously depends on the size and condition of the home, but $50,000 is pretty common these days). Why spend so much, when there are so many buyers out there? The first part of the answer is that yes, there are lots of buyers, but there are also other homes for sale, so it’s important that your [...]

By |September 22nd, 2020|Interiors, Remodeling and Repairs, Sellers|

THE OUTLOOK: Berkeley (North & Hills), Summer 2020 wrap-up

Between the pandemic, the wildfires, and the blanket of smoke we’ve had to live with lately, one would think that the local real estate market would have gone into hibernation, but this has not been the case.  The pandemic has caused many people to re-evaluate where they want to live.  We’ve been spending much more time in our homes— for work, for school, for meals, for entertainment, for exercise, for leisure— so having the right indoor and outdoor spaces for those activities is more important than ever.

Many people working from home are moving to take advantage of lower real estate prices and bigger yards in more remote locations.  While that has meant that some people have left Berkeley for more rural spots, we’ve also seen more people than ever leaving San Francisco for Berkeley.  Overall, there have been more than enough new Berkeley buyers in the market to balance flows out of our area, and we’re still seeing quick sales, solid prices, and multiple offers on many properties.

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Berkeley Hills, Summer results:

There were 61 active listings in the hills this summer, which is actually on the high side, but this is because some of what would have been spring sellers delayed coming on the market. There were 101 active listings in the hills for spring and summer together, compared to 115 listings for spring and summer of 2019. This summer, 29 properties sold, in an average of 25 days on the market. Two-thirds of those sales were for more than list price, and those averaged 8% over list.

The median sold price in the hills was $1,440,000, which is down from both this spring (by 4%) and last summer (by 8.2%).  However, sold price per square foot was $778, which is 6.8% higher than the spring, and 1.1% higher than for summer 2019.  When these two measures (median price and price per square foot) move in opposite directions, it means that the mix of properties sold was different between the time periods (in this case, there were more small homes in the data this summer).

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North Berkeley, Summer results:

In North Berkeley, there were 36 active listings over the summer, which is  high for this area (last summer there were only 23 active listings), but again, this is because some homes that would have been listed during the spring didn’t actually come on the market until the summer.  There were 30 properties that sold over the summer in North Berkeley, in an average of 19 days on the market. Four out of five of those sales (80%) were for more than list price, and those averaged 18% over list.

The median sold price for the summer was $1,320,000, which is down 1.3% from the spring, but up 2.3% from last summer.  Sold price per square foot averaged $888, which is down from both the spring (by 2.8%) and from last summer (by 5.1%).  There were 6 properties that sold for more than $1000 per square foot, and 4 that sold for less than $700 per square foot.  The lowest was $512 per square foot for a tenant-occupied fixer on Marin.

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Because of the pandemic, we’re seeing less demand for condominiums and tenant-occupied properties right now, but in both North Berkeley and in the hills, values for other types of properties are stable, or even up very slightly from last year.  Interest rates continue to be historically low, which should keep the market strong through the end of 2020.

 

 

REAL ESTATE ANSWERS: Why (and how) do so many local sellers spend so much money getting their homes ready for sale?

Why (and how) do so many local sellers spend so much money getting their homes ready for sale?

Sellers in our area routinely spend tens of thousands of dollars on work and staging in preparation for putting their home on the market. (The amount obviously depends on the size and condition of the home, but $50,000 is pretty common these days). Why spend so much, when there are so many buyers out there?

The first part of the answer is that yes, there are lots of buyers, but there are also other homes for sale, so it’s important that your home compares well to the competition.

The next part of the answer is that cosmetic upgrades can significantly increase the sale price.  If someone is approaching a home purchase in a very rational, logical way, they’ll look at what a reasonable price per square foot for the property would be, and use that to decide what they’re willing to pay. In contrast, someone who is in love with a property thinks about it with emotion.  The properties that sell for crazy-high, top-dollar prices are not selling to buyers who are doing rational calculations. They’re selling to buyers who are in love, and what makes buyers fall in love is not square footage or room counts, but rather style and design, and the ability to see themselves blissfully living in the home. Most buyers can’t envision how much a property can be improved with basic changes.  If parts of a home are not to their liking, they picture major remodeling, at high expense, requiring lots of time and attention (which many buyers don’t have to spare).

Here’s one example. If the buyers don’t like the kitchen in a listed property, they almost always factor in the cost of a complete kitchen re-do, which can reduce their willingness to pay by $100K+.  Most kitchens can be radically improved in a short period of time for much less, by doing things like painting and replacing things like counters, faucets, flooring, hardware and/or appliances.  If you spend $20K (to choose a round number) to refresh the kitchen, and it makes the buyer content with the space, they won’t have to subtract that $100K+ from their offer (and they’re more likely to fall in love!).  To create the overall picture and get buyers to fall in love, sellers around here routinely do some combination of painting, floors, staging, gardening, and refreshing the kitchen and bath(s).  If a seller ends up spending $50K and gets an extra $200K from the sale, the return from the investment is 300%. That’s why they do it!

Note though that it’s not enough just to spend money on preparation and staging.  The work done needs to be well-chosen, and targeted to the buyer pool.  I’ve seen far too many houses where they’ve done lots of prep work, but it’s badly chosen, so there’s little return. A good agent understands what appeals to buyers, and will guide the process to make sure the final look is one that will bring you top dollar in a sale.

How do sellers pay for the preparation work?  Many sellers pay up front, but there are also ways to borrow the funds or defer payment for the work done until the close of escrow.  The best option varies with the circumstances, but I’m happy to discuss the possibilities with you if you’re thinking of making a move.

 

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

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