A big question on many people’s minds lately is “how is the real estate market doing?” One important answer to that is that inventory has been really low so far this year.
- There were only 32 listings on the market in the Berkeley hills during the first quarter (Q1) of 2023, which is less than half the number from the same period last year. With so little inventory, there also weren’t many sales. The 15 sales in Q1 this year were also less than half as many as in the first quarter of 2022.
- In North Berkeley, there were only 19 listings on the market in North Berkeley during the first quarter (Q1) of 2023, and only 11 sales. With so few sales, it means that the summary statistics are going to be influenced a lot by the specifics of the properties that sold.
Why is inventory so low? In addition to the factors I mentioned in the last newsletter (concerns about market conditions and sellers not wanting to give up their existing low interest rate loans), the weather has also affected plans. One of the most common things sellers do to prepare their homes for the market is painting, and many exterior painting projects have been delayed because of all the rain we’ve had. In general, low inventory (and lack of competition) is good news for those homes that did come on the market.
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Berkeley Hills, Q1 2023 results:
For the first quarter of 2023, the median sold price in the hills was $1,935,000, which is up 30% from the previous quarter, but down 4% from this same period in 2022. These numbers reflect the 2022 rollercoaster market—the huge upward spike in prices at the beginning of the year, completely reversed by the end of the year as interest rates climbed.
Average sold price per square foot for Q1 2023 was $901, which is again higher (by 11%) than the end of last year, but down (by 6%) from the first quarter of 2022.
Four properties had price reductions before they sold, and properties spent on average 31 days on the market. (Not surprisingly, it was the four properties that reduced their price that pushed the average days on the market up.)
Two-thirds of the sales were for more than list price, on average 24% above list for those that went over.
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North Berkeley, Q1 2023 results:
The median sold price in North Berkeley was $1,400,000 in the first quarter. This is down very slightly (0.2%) from the previous quarter, and down 13% from this same period in 2022 (when prices were spiking).
Average sold price per square foot for Q1 2023 was $928, which is down 7% from the end of last year, and down 16% from the craziness of the first quarter of 2022.
There were no price reductions, and properties sold very quickly, on average after just 13 days on the market, which is even faster than during early 2022. I think these two facts better represent how the North Berkeley market is faring overall than the price statistics. Condos made up a bigger share of the total, which pulls down the median price, and one large very funky property on MLK sold for just $517 per square foot, which pulled down that average. At the same time, there were 4 single family homes that sold over $1000 per square foot, up to a high of $1436 per square foot for a 2-bedroom bungalow on McGee.
In North Berkeley, 73% of the sales in the first quarter were for more than list price, on average 25% above list for those that went over.
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Buyers are still out there, but with the perception that the market has cooled, they are definitely more picky. Properties that are not well-prepared and/or not appropriately priced are sitting on the market, while those that are well done are selling quickly with multiple offers.
