Can you feel the hustle and bustle? No, not with Real Estate (Real Estate is finally taking an overdue break) but with preparations for the holidays? Whatever celebration you honor, I suspect that most of you are busy shopping and wrapping presents, baking cookies, delivering goodies (yum), decorating, and donating to your favorite charities.
"Tis the season . . ."
While your kids will be tearing into packages come Christmas morning, I'll hopefully be skiing down the slopes in Steamboat Springs, Colorado, with mine. (Heaven.) Hey, I may have swapped Christmas for Chanukah when I joined Cliff's family 25 years ago, but there are some real advantages to the Jewish traditions and the simplicity of those eight days of lights. Let's just say that a menorah is certainly more portable than a tree, and who doesn't love a good latke? (I guess if you were wandering the desert for 40 years, you'd want to keep the load light too.)
It'll be my first time in Steamboat and I'm looking forward to getting away for a few days. So Merry Christmas, Happy Chanukah and Kwanza. Until we meet again in the New Year, I'm wishing you all a season of peace and joy.
Speaking of the New Year and how it pertains to Real Estate . . .
What do we expect 2015 to bring? Where are we headed?
And how did the market perform in 2014?
(I'm glad you asked.)
It just so happens that on Tuesday I attended the annual holiday luncheon hosted by First Republic Bank at the St. Francis Yacht Club in San Francisco. (Thank you Chad Rego for the invite.) First Republic always does an amazing job of laying out the economic landscape - both locally and globally - and then providing a forecast for the coming months and this year was no different. Alan Zafran, Senior Managing Director and Portfolio Manager of First Republic Investment Management, passed along his wisdom and experience that's well worth sharing. (It doesn't come with a bow, but it's a gift nonetheless.) I hope you find it as informative as I did.
In a nutshell, here's what Alan Zafron had to say:
In short, the East Bay is a great value by comparison to San Francisco, South Bay, and North Bay Area markets, where Palo Alto, Hillsborough, Los Altos and Marin all come in at, or near the TOP of the list as the most expensive communities in which to live.
Make no mistake, Oakland, Piedmont, and Berkeley saw great demand as well so while you won't necessarily find bargains here, you will absolutely find OPPORTUNITY. (Folks, that's the sound of knocking at your door.) With interest rates at all-time historical lows, no one expects much to change in 2015, although at some point, the market must hit its ceiling, according to our esteemed speaker.
Have we hit the top yet?
No one knows, but Mr. Zarnoff felt we were certainly getting near the peak. In a baseball analogy of a nine-inning game (and who doesn't love a good baseball analogy?) he surmised that we were in the seventh inning, suggesting that there is still time to buy before housing prices level off, OR begin to correct. (Keep in mind that ALL markets are cyclical, as evidenced by the 2008 crisis.)
As for Piedmont, in 2014? 142 properties traded on the MLS (Multiple Listing Service) with the top selling price coming in at $5,450,000 and the lowest price recorded at $810,000. The average selling price was approximately $1,867,000 and the median was $1,715,000. Again, with a booming economy and unemployment at its lowest rate in years, Mr. Zafron predicts NO decrease in values in the new year - barring any unforeseen circumstances, of course.
To give you some context, 2013's selling price in Piedmont averaged approximately: $1,614,000 with the lowest recorded price at $665,000 and the highest, at $4,900,000. (Days on market averaged 22 in both calendar years, but is always skewed by those few houses that languish; 22 days doesn't accurately represent the speed of the market by any means). Only 117 homes traded on the MLS in 2013 compared to 149 homes in 2014. Evidently, Sellers took advantage of a red-hot market and were rewarded in kind. Were you among them? (Happily, I was.)
Thus inventory was up, but so too was Buyer demand. In nearly every case, multiple offers were presented, driving the sales price to 25-35% above the list price and sometimes, well, WELL beyond. Whether this is welcome news or not, it's going to be the same for the foreseeable future until housing stock catches up with those willing and able to buy.
So that's the gist of the marketplace: past, present and future . . . 2014 came in with a bang and only got better as the year progressed. As for 2015, whatever you decide to do with your own home sale, home search, home purchase, or home project, just know that I am here to be a resource, to provide guidance, and to bring clarity. Your continued support and referrals made my year and I don't take them lightly. Thank you very much and Happy New Year!
How can I help you?
(P.S. - You can follow my own renovation on my new blog: Renovation Riptide. I invite your comments and stories. )
Julie Gardner, has been writing The Perspective for 18 years and has published more than 670 essays on life and real estate.