A Hot Seller’s Market
The majority of East Bay houses are going for over the asking price.
This Alameda property, 3259 Sterling Ave., went for significantly over the asking price.
Photo by Sean Poreda, LuxeHomeTours; courtesy of Kate McCaffrey, Pacific Union/Christie’s International Real Estate
The great majority of homes in many areas of Oakland and the East Bay are still selling for over the asking price with some eye-popping over-asking offers for some properties.
The top premium since June was $575,000 over asking for an Oakland home that sold for $1.75 million after it was listed at $1.2 million, according to the East Bay Regional Multiple Listing Service, the service that Realtors use to track home inventory and sales.
A less-expensive home earned an even higher percentage premium when it sold for $1.3 million, $450,000 over its offer price of $850,000.
Overall, 673 Oakland homes sold for higher than the asking price in the past four months, 101 at asking, and 167 under asking, according to the MLS.
The reason behind the bidding wars is mostly because of changes in the way real estate agents and sellers market properties over the past two decades, said Bill Boze, a Realtor in the Montclair office of Highland Partners, Better Homes and Gardens Mason McDuffie Real Estate.
Unlike years ago, most asking prices “no longer have any relationship to what the property is actually worth,” he said.
Boze advises buyers to check the latest sales figures in the neighborhoods of the homes they are interested in to get a better idea of how much it will take to land the house.
Jesse Sperling of RE/MAX in Oakland said there is a “sweet spot” now of $499,000 to $699,000 where the demand from first-time homebuyers is greatest.
There are a number of examples of homes that were listed at the low end of this range since June and ended up selling at the high end or even higher with multiple offers. For example, a two-bedroom, one-bath home at 1954 Clemens Road in Oakland’s Oakmore district was listed for $499,000 and sold for exactly $700,000.
Another two-bedroom, one-bath bungalow with a remodeled kitchen and bathroom at 4026 Aspen Place in the Laurel district was also listed at $499,000 and sold for $710,000 or about $700 per square foot.
At the higher end of the market, 862 Trestle Glen Road in Crocker Highlands, with four bedrooms and two and a half baths, was listed for $859,750 and sold for $1.125 million.
That buyer got a lot more space for the money than the lower-priced houses at $516 per square foot.
Alameda posted similar results. For example, a two-bedroom one-bath at 3259 Sterling Ave. in the Fernside district listed for $619,000 and sold for $743,000. And a three-bedroom, two-bath bungalow at 151 Fountain St. garnered 10 offers and sold for $1,095,000, a whopping $256,000 over asking.
Boze said his best result representing a seller came on a house on 59th Street in what agents have begun to refer to as NOBE, meaning North Oakland/Berkeley/Emeryville. His client listed the home at $629,000 and after two Sunday open houses received offers of $670,000, $700,000, and $735,000 before taking the highest offer, $106,000 over asking.
“The buyers were coming from San Francisco, so it turned out to be a tremendous value for them, even though it needed updating in the kitchen and baths as well as a new roof,” Boze said. “Anything similar in San Francisco would have been way more.”
Boze said he is quick to emphasize to clients that not all homes get multiple offers and that some properties get overlooked when owners list them close to their real values and no one makes an offer. He said he advises buyers who want to avoid multiple-offer situations to take a look at homes that have been on the market for a while and haven’t sold. Sometimes there is something wrong with the home, such as it has a bad floor plan, it’s in a bad neighborhood, or it has fatal structural issues.
“But sometimes it just got overlooked, and nobody comes back to look at it again,” Boze said. “Once it sits, buyers become focused on the new listings.”
Although he thinks the over-bidding is still hot and heavy, Sperling said he’s seeing more inventory coming on the market, which might cool off things off a little bit.
“Some listings are even getting price reductions, but that’s pretty recent over the last month,” he said. “But, if one looks at the data of what the market is doing, overall homes are still selling for over asking with multiple offers.”