Berkeley House Selling For $1.5 Million Over Asking Indicative of Soaring Real Estate Prices
The San Francisco Bay Area’s real estate market may be rebounding, but the recent sale of a four-bedroom home in Berkeley raised some eyebrows.
As reported on CBS KPIX5, the house, which is located on a desirable corner lot in the Claremont neighborhood, was originally priced at $2.75 million but sold for $4.25 million --
1.5 million over its listing price.
According to real estate agents across the Bay Area, it is a sign of the times. Prices of homes have gone up and bidding wars have risen from Marin County to Silicon Valley.
“In the East Bay, there’s simply more demand than houses available, so I’m not surprised that we got so many offers,” said Compass Realty listing agent Julie Nachtwey, who listed the Berkeley home.
“The home has lots of character, and the stunning interior remodeling was over the top,” she added. “The owners are selling because they want to downsize, now that the youngest son left for college. They’re ready to travel and do other fun things.”
The owners bought the home, which was built in 1911, for $1.58 million in 2016. The home was only listed for 10 days when a major bidding war took place among potential buyers.
“The house itself is one of a kind. But, it’s not so much about how much someone paid over the asking, it’s about the fact that people pay a premium for the characteristics they want,” Nachtwey said. “It’s normal to have more than 2 or 3 offers, but sometimes there are 20. It depends on each individual situation. But it’s like an auction — the more people who put their hands up, the higher the price goes.”
According to CoreLogic, a real estate data tracking firm, the median price for a single-family home in the Bay Area rose 12.8% in August over last year. Prices went up by double-digits in Alameda, Santa Clara and Solano counties.
“It’s not surprising considering how special homeownership is in Berkeley, the extremely limited supply of single-family detached homes in Berkeley, and the historically low interest rates which don’t necessarily make homeownership in Berkeley affordable, but it makes it possible for buyers to make these high, over-asking offers,” said David Stark, with the Bay East Association of Realtors.
In addition, the median sale price for a single family home was higher this September compared to last September in every city they track in the East Bay, with Albany being the exception, according to Bay East Association of Realtors data.
Houses in the Tri-Valley area witnessed the largest increase, where the median sale prices for homes in Alamo, Danville, Dublin, Livermore, Pleasanton, and San Ramon are all more than $1,000,000.
“These market conditions are sustainable, especially as long as supply stays relatively limited,” Stark said. “This is absolutely a seller’s market right now because the supply is so limited.”
Combine the low inventory with the historically low interest rates, he says that’ll remain the case for some time.
“If your heart and mind is set on a particular community, you’ve gotta be ready to make a very competitive, aggressive offer,” he said.
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