Berkeley Bay Area Realtors
 Your real estate team for Berkeley, Albany, Kensington, El Cerrito and Oakland

Heidi and Jerry Long
Red Oak Realty
1891 Solano Avenue, Berkeley
Direct Line: (510) 835-6218
E-mail: |

Bay Area Real Estate Market News

©Jerry Long - Spring 2007

This spring's early market strength is giving the lie to the idea that the market has weakened. Many properties have flown away with multiple offers after one or two open houses.

Spring has always been the best time to sell a house. Even in the hottest times, things slowed down over the holidays and then came crashing back when the buds and blossoms began to appear in late February and early March. This year is following the pattern.

Prices on those houses which flew away were probably somewhat more realistic than they might have been in the past and this may have contributed to buyers seeing them as good investments. Last fall sellers were angry at being the ones who got bitten by the market stalling. Some of these people just fumed and refused to take offers which, although realistically reflecting what was going on, did not meet the sellers' expectations. Many of those who are putting their properties on the market this spring may have gotten the message that they can't simply go for their wildest fantasies of what their houses are worth.

Another interesting aspect of this spring's market is the presence of several short sales. A "short sale" is a state of affairs where the listing price on a house is less than the amount the owners owe on their mortgage. It's really the bank selling the house and sometimes the nominal owners have to make up the difference between what the buyer pays and what they (the sellers) owe. It depends on the bank. The possibility of a short sale arises when a buyer takes out a "creatively" financed loan, frequently 100% of the purchase price, and frequently structured so they can pay so little each month that the loan keeps on getting bigger instead of smaller. They are financing the interest on the original loan. The "creativity" is predicated on the history of prices appreciating at large ratios. If things flatten out, the borrowers quickly start owing more than the house is worth.

We'll have to wait to see if the strength continues unabated or turns out to be a spring time phenomenon. There is no question that the Bay Area has one of the strongest micro-economies in the country. Or that Berkeley and the surrounding communities are among the best places in the world to live. So it's certainly possible that last fall's market blip will turn out to be, as they say in the stock market, a minor correction. It's certainly possible that prices will continue to creep upwards the way they have for most of the last thirty or forty years, even if they don't register the double digit increases of the past ten or so.

It's never too soon to buy a house, especially if you're going to live in it for a number of years. By the same token, when you realize that the time has come to pursue that idea that's been swirling around in the back of your head about moving to some other place in order to pick up on some other thread of life, or to downsize, or whatever, this is a great time to cash in and move on.

We're here to help in either case.

Jerry's Previous Market News
  1. Market News - Fall 2006
  2. Market News - Winter 2006
  3. Market News - Fall 2005
  4. Market News - Spring 2005

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