Strong Buyer Competition Returns to Berkeley
The Berkeley real estate market has felt much more competitive this spring, with noticeably more bidding for desirable homes than we’ve seen recently. The number of active listings was unchanged in North Berkeley and up in the Hills, but buyers have been much more aggressive. One reason may be expectations that major AI companies, including OpenAI (ChatGPT) and Anthropic (Claude), will go public later this year. Whether or not those IPOs happen on schedule, buyer demand has clearly strengthened, as many buyers appear to be trying to purchase before a possible influx of new tech wealth into the Bay Area.
North Berkeley
Inventory remained extremely limited in North Berkeley, with 43 active listings during the second quarter, the same number as a year ago. A total of 36 homes sold during the quarter.
- Median sold price: $1,800,000
- Up 13% from Q1
- Up 22% year-over-year
- Average sold price per square foot: $980
- Down 8% from Q1
- Down 3% from a year ago
- Sold over list price: 89%
- Averaging 37% over asking
The sharp increase in the median price is due in part to the larger homes that sold this spring. Five North Berkeley homes sold for more than $3 million, including the highest sale of the quarter, a large remodeled Edwardian on Milvia that sold for $3,570,000.
You can see the effect of the larger homes in the average sold price per square foot data, which was actually down this spring. As we’ve discussed in the past, larger homes generally sell for a higher overall price, but for less per square foot. As always, there was a wide range in sold price per square foot among individual properties. The lowest sold price per square foot this quarter was $470 for a five-bedroom fixer on Vincente, while the highest was $1,556 for a three-bedroom home on Sonoma that also sold for more than $3 million.
Berkeley Hills
The Berkeley Hills also experienced stronger buyer demand this spring, although buyers had more homes to choose from. There were 99 active listings during the quarter, up from 89 a year earlier, and 72 homes sold compared to 52 last spring.
- Median sold price: $1,726,000
- Up 8% from Q1
- Up 7% year-over-year
- Average sold price per square foot: $919
- Up 12% from Q1
- Up 12% from a year ago
- Sold over list price: 86%
- Averaging 32% over asking
Property values strengthened during the quarter, with both the median price and price per square foot increasing. Among the seven Berkeley Hills homes that sold for more than $3 million, two tied for the highest sale price at $3.5 million, including a five-bedroom home near the top of Spruce. That same property sold for $3.175 million in 2021, before mortgage interest rates more than doubled. Its appreciation since then reflects the underlying strength of the Berkeley Hills market despite much higher borrowing costs.
Sold prices ranged from $537 per square foot for a five-bedroom home on Hillview to $1,428 per square foot for a three-bedroom home on Arch. Homes sold in an average of 21 days, and only six properties required price changes before finding buyers.
Looking Ahead
I’m seeing noticeably stronger buyer demand of late, and if the anticipated AI IPOs do occur this fall, competition could become even stronger. It certainly appears to be an excellent time to be a seller, and market conditions seem likely to remain favorable through next spring.
