The East Bay real estate market continues hot streak with homes selling for $1M over asking price
As reported in the San Francisco Gate, the Berkeley sale was newsworthy because it sold for double its list price and got 29 offers. According to recent real estate data, this type of real estate news is becoming more common in today’s real estate market
, particularly in the East Bay area.
“People are not surprised when a home goes $1 million over,” said Josh Dickinson, the founder of real estate agency Zip Code East Bay. “When my clients see a house for $1.9 million they’re almost conditioned to think it'll go over $3 million in Piedmont or North Berkeley.”
While overbidding is not a new concept in the Bay Area, this year has been more aggressive with more bids per home and more generous offers.
“I think I could pull up the MLS and pull up a dozen [listings] that went more than a million over this year so far,” Dickinson said. “Most of them had the ‘it factor,’ but some of them were just in the right place at the right time.”
He said some examples of the “it factor” are spectacular views, a backyard or room for a home office. For a home he recently sold in Berkeley, it was only the second time in 93 years the property was placed on the market. Dickinson said the home’s history and its lush and expansive backyard made it a desirable home to purchase, but he did not imagine it would sell for more than $1.2 million over the list price.
“Even we don't know as savvy agents. We don’t know when the thing is going to go bonkers,” he said. “We just try to let the market do its thing.”
Although an attractive financial offer is important, there are plenty of interesting offers that come in. Dickinson said one of the bids on the Berkeley home included free one-week stays at an Airbnb in Tuscany for the next 10 years. While it’s not the offer the sellers accepted, it piqued their interest, he said.
Over the years, other offers have included stock options from major tech companies.
When the offers are that high, the accepted bid is usually cash. A five-bedroom home in the Elmwood neighborhood of Berkeley that was listed at $1.995 million closed in April for $3.15 million, all cash. According to MLS data, since March there have been at least 20 properties that have sold for over $800,000 over the listing price in the East Bay and six of those went for $1 million or more over the asking price.
Overall, Bay Area home prices are up 6% as compared to the same time last year.
When looking at Redfin data, the Bay Area had fewer homes sell for more than $800,000 over asking from May 1, 2020, to April 30, 2021, than from May 1, 2018, to April 30, 2019. However, in the 2018-2019 data, 20 homes in San Francisco and 19 homes in Palo Alto sold for more than $800,000 over asking, whereas in the 2020-2021 data, just 10 S.F. homes and five Palo Alto homes had this type of sale.
“The market still heavily favors the sellers, but there's a lot of optimism for the buyers,” Dickinson said, adding, "There was a house in Berkeley this week that only got four offers. And that gives me hope.”
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