BERKELEY (CBS SF) — Even in the recovering San Francisco Bay Area real estate market, the recent sale of a four-bedroom home in Berkeley caused quite a stir.
The home, located on a coveted corner lot in the Claremont neighborhood, was originally priced at $2.75 million but sold for $4.25 million — a whopping $1.5 million over its listing .
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It’s a sign of the times, according to real estate agents across the Bay Area. Since the market awoke from its COVID slumber, home prices have skyrocketed and bidding wars have escalated from Marin County to Silicon Valley.
“There’s just more demand in the East Bay than homes available, so I’m not surprised that we’ve had so many offers,” said Julie Nachtwey, listing agent at Compass Realty, which listed the Berkeley home.
“The house has a lot of character and the stunning interior renovation was over the top,” she added. “The owners are selling because they want to downsize after the youngest son left college. They are willing to travel and do other fun things.”
The owners bought the 1911 home in 2016 for $1.58 million. They had only listed it for 10 days, during which a heated bidding war broke out among potential buyers.
“The house itself is unique. But it’s not so much about how much someone paid over and above asking, it’s about people paying a premium for the properties they want,” Nachtwey said. “It’s normal to have more than 2 or 3 offers, but sometimes it’s 20. It depends on the situation. But it’s like an auction – the more people sign up, the higher the price goes.”
According to CoreLogic, a real estate data tracking company, the median price for an existing single-family home in the Bay Area increased 12.8% in August from a year earlier.
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Prices rose double digits in Alameda, Santa Clara and Solano counties.
“It’s not surprising given how special homeownership is in Berkeley, the extremely limited supply of freestanding single-family homes in Berkeley, and historically low interest rates that don’t necessarily make homeownership in Berkeley affordable, but do make it possible for buyers to make these high ones.” , inflated offers,” said David Stark of the Bay East Association of Realtors.
The median selling price for a single-family home this September in every city they track in the East Bay except Albany was higher than last September, according to data from the Bay East Association of Realtors.
Homes in the Tri-Valley area saw the largest increase, where the median selling prices for homes in Alamo, Danville, Dublin, Livermore, Pleasanton and San Ramon are all over $1,000,000.
“These market conditions are sustainable, especially as long as supply remains relatively limited,” Stark said. “It’s absolutely a seller’s market right now because supply is so limited.”
Combine low inventories with historically low interest rates and it will remain so for some time, he says. So buyers should be ready to play ball.
“If your heart and mind are set on a particular community, you have to be ready to make a very competitive, aggressive bid,” he said.
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Max Darrow contributed to this story.