Market Update
With home owners sitting on 2-3% mortgages from the preceding decade, and pent up demand, what should we expect from the housing market in 2024?
The Oakland Hills as seen from Skyline Blvd.
The tides have started to turn buyers are out looking for homes and we are seeing multiple offers with homes selling for over asking in the first 1-2 weeks.
Despite rising interest rates, over the last 12 months, the tides have started to turn buyers are out looking for homes and we are seeing multiple offers with homes selling for over asking in the first 1-2 weeks . It's all about the house, how well it's repaired, prepared, and staged or how the homes that are usually turnkey but also fixers that are priced and presented in their best light highlighting their potential are selling for over asking. The average Oakland home sells for 4% over list price and will go pending in around 33 days. However as mentioned, turnkey homes and well presented fixers priced strategically will sell for around 12% over asking price and go pending in about 14 days or on the offer date.
Legal Update
Homeowners, here is an update or laws that have recently passed that might affect you now or when you go to buy or sell your next property.
Assembly Bill 968
Flippers of Residential 1-4 unit properties must disclose recent repairs and renovations to the property in addition to all other recent disclosures. Applies to properties that are resold within 18 months of closing. Standard TDS categories, exemption and cancellation rights apply. Is enacted as California Civil Code 1102.6h. Effective for all transactions where the seller accepts an offer on or after July 1, 2024. #californiarealestate #eastbayhomes
Assembly Bill 1033
Allows local agencies to adopt ordinances to allow the separate conveyance of an ADU from the primary residence as a condominium. Must comply with the Davis Dash Stirling Common Interest, Development Act, and the Subdivision Map Act. (is codified as Government Code 75852.25) Effective January 1, 2024
Senate Bill, 684:
Requires a local government to ministerially approve, without discretionary review or a hearing, a parcel map, or a tentative and final map for a housing development project, where the proposed subdivision will result in 10 or fewer parcels and the housing development project on the lot proposed to be subdivided will contain 10 or fewer units. (is codified as government code 65852.28, 65913.4.5, and 66499.41) effective January 1, 2024
Assembly Bill 12:
Landlords may collect no more than one months rent for either furnished or unfurnished units. In addition to first months rent there is an exception for small landlords, defined as a landlord, who is a natural person or LLC, and owns no more than two residential rental properties with no more than a total of four units offered for rent. (is codified as civil code 1950.5.) effective July 1, 2024.
-Source CAR California Association of Realtors
The Federal Reserve Shows Signs of a optimism (update: but is not yet decided)
"The board of governors of the federal reserve system voted unanimously to maintain the interest rate paid on reserve balances at 5.4%, effective February 1, 2024".
"Recent indicator suggest that economic activity has been expanding at a solid piece. Job Gaines have moderated since early last year, but remain strong, and the unemployment rate has remained low. Inflation has eased over the past year, but remains elevated. The committee seeks to achieve maximum employment and inflation at the rate of 2% over the long girl run. The committee judges that risks to achieving its employment and inflation. Goals are moving into better balance."
(This outlook and decision to hold the interest rate remained the same at the March 20, 2024 meeting.)
Source: Federal Reserve Press Release Notes from the January Meeting
Why Sellers Should Offer Buyers Agents Compensation
As many sellers know, all offers of compensation are negotiable, so I agree to offer a substantial fee to the buyers agent?
As you may recall when purchasing your first home buyer save up for some time to make their out of pocket cost to make the first purchase.
These fees are not insignificant and include the down payment, closing costs, and now fees, like sewer, lateral sidewalk, and other point-of-sale ordinances, depending on which city you are in, if not already done by the seller before listing the home, and sometimes this will even include insurance requirements after close of escrow or during escrow. Although I realize in the East Bay, many people come in with a significant amount of cash down, your average, for every day buyer, that's a hefty chunk of money that they will not take that much cash lightly. Therefore, for most buyers, paying out of pocket for the commission on top of all that is really not an option for them. (On a separate blog post I'll go into why buyers agents are worth it, and trust me, they are.)
When a seller includes the offer for both brokers compensation in the listing agreement, what it does is, boil it in with the purchase price, so that it's not another out-of-pocket cost for the buyer. To be honest, either way, whether it's cash or boiled into the financing in purchase price, it always impacts the sale, it always has. But at least this way it allows buyers to save on that cash, which makes up a portion of the overall purchase.
This also allows buyers to then write higher offers since allowing them to leverage the financing, which has a minimum down payment requirement for any mortgage to be under written, is the essential part of what they pay for the home. Also, when his seller includes the offer of both brokers compensation in the listing agreement, it also is said to prevent issues related to fair housing, and to bring more buyers to your home.
(For more information on where this commission concern originated see the following post "Commission Update".)
My Recent Listings and Sales
Active: 5915 Balboa Ave, Oakland CA $2,075,000
Sold: 50 Woodcliff Ct., Oakland CA 94605 - $1,300,000 (sold $175,000 over asking)