Just wanted to take a few minutes to write out some thoughts on our current, extremely heated market. As you look down at your smartphone (where you’re probably reading this) you might note that the amazing innovations we all treasure in computer technology, in mobile apps and connectivity, in the ever advancing fields of social media and on-demand utilities, this is where you can trace the roots of this crazy upsurge in home prices in the bay area in general— and Oakland is right in the thick of it. Many of you who’ve been on the hunt for homes, I know, have had challenging times. Not only is it tough enough to find a home that suits you that at least SEEMS to be in a price range you can live with, but even after reaching that point there’s always the specter of how many others will be competing for that same home. And yes, just in the last 30 days we’re seeing sale prices 30%, 40%, even up to 60% over the list price— which makes it difficult to even recognize what list price range is even legitimate anymore. Some of it seems a bit ridiculous, and some listing agents are quite notorious for pricing their listings well below what is a reasonable selling price for the neighborhood. So how can anyone know what is reasonable to offer? Can an inspection contingency even be requested? How short of an escrow period is required when competing these days? These are all questions that have come up, and the real answer for them truly is that every listing and every offer is different. Frankly, it takes regular observation of the market to even have a clue, and even then some well funded buyer who’s made five or ten unsuccessful offers may come along and blow everybody out of the water just out of pure frustration over shopping for so long. It happens. Some sales that I personally find interesting include a few here, here, and here where the ratios are closer to around 10% over list price and simply seem more reasonable. Some that were on the market for a little while ended up closing in closer relation to the list prices, though the pickings are pretty slim in that category these days. Almost everything is selling for significantly over the list price, and that’s just something you have to figure into your approach. If you’re getting financing and you’re qualified to purchase up to $800k it’s going to be generally unwise to search for homes priced at $750k since those ones will probably end up selling closer to $900k or more in many cases. Probably best to look in the mid-$600s or so for the ones that will end up selling where you’re qualified to purchase. I know it’s crazy. It’s just how it is.
Of course there are exceptions. We are always looking for those individual listings where it looks like there is an opportunity. Yes we have some particular criteria we look for in identifying those types of opportunities. Once again, it really does take very regular observation to be able to recognize those listings. And that’s what we’re here for. We do quite a bit more than just open lockboxes, write up contracts, and meet inspectors for you. We are looking for listings that can actually become good deals! Even in this market. And considering not one local city is included in this recent article of where millennials can afford to buy we know we’ve got our work cut out for us. And just across the bay in San Francisco they’ve reached a new high of over $1.2M as their median price! Crazy! Apparently only 12% of the city’s households can even afford that median price. So hello San Francisco buyers! We know you’re here in Oakland, and we know more of you are coming to Oakland. Please note how number 8 on this list of “10 Ways SF Has Actually Gotten Better” is OAKLAND!
We know you need help navigating the Oakland market. It’s a technical trail. But we’re here for you in both the home search and the financing. So don’t hesitate to contact us, or refer us someone you know. We’ll take good care of ’em! Hope you guys enjoy this week’s picks. Lots of great ones to see this week!