For the past four years, our country's economic woes, including the devastating credit and foreclosure crises, have consistently been headline news. Nationwide, millions of households have been affected by foreclosures and home prices have plummeted. Based on this info, people often begin the process of purchasing a home with incomplete information.
Well aware that getting a loan can be difficult, once preapproved, buyers are relieved and hopeful. If the national news is any indicator, there are a surplus of homes sitting on the market and sellers are desperate to sell. Homes should sell for less than asking (or at least not more), buyers should have some time to consider whether they want to purchase a particular home after seeing it and before making an offer.
What national news and even local news, unless extremely local, tends to miss is that real estate markets vary widely. While prices continued to drop nationwide during the first part of this year, Oakland prices actually increased 13%. And this is unique for Alameda County, Oakland was one of only three Alameda County cities where prices increased.
Another statistic rarely discussed is what percentage of homes are sold for more than the seller's asking price. Again, the news would suggest that people are getting deals and to most people, a "deal" means that they are able to purchase something for less than the asking price. Most Realtors in the Bay will tell you that plenty of homes are still being sold for more than asking. Right now, some of my clients are able to purchase a home for less than asking but on the more competitive homes, that's not always the case. And motivated sellers who can afford to price their home aggressively are doing that and pricing them below the market value. I looked at MLS data for the 448 homes sold in Oakland between January and April of 2011 and found that 42% sold for more than asking.
The good news is that first time buyers who never thought they could buy in the Bay are buying great homes at prices that are much more affordable than they were several years ago. Most have been able to secure great interest rates and manageable 30-year fixed loans. After what can be a crazy process of rushing to beat savvy investors, trying to figure out how much is too much when it comes to repairs needed on an older home and determining what to compromise when assessing the options in their price range, many first time buyers are happy to have purchased in the most affordable and sustainable real estate purchasing environment in many years.
