After a few years of an exciting real estate market, Real Estate had definitely slowed around the United States during the last half of 2022. However, the Bay Area market is having an unexpected uptick in sales, according to Venema Homes Real Estate Team owner Liz Venema.
“Due to what experts were predicting, we were expecting it to be very slow for at least for the first three quarters of 2023,” she said. “But what we found was there's such little inventory that the people who do need to buy have little to choose from, so it’s a seller's market again. When the sellers price their home correctly, we are experiencing multiple offers on most properties.”
The East Bay’s proximity to Silicon Valley is a key reason for our successful market.
“The tech industry feeds us,” Venema said. “We're 45 minutes away, and buyers can get so much more house for their money here than in the Silicon Valley.”
Despite interest rate hikes, competitive pricing of homes means now is a good time to buy, Venema said. However, it’s worth considering a five- or seven-year Adjustable Rate Mortgage (ARM) loan.
“It used to be common to apply for a 30-year loan,” she explained. “There is no reason to do that currently. Go for fewer years for your loan and save yourself some money in the short term.”
“When the interest rates go back down, you will have already purchased the home at a great price, and then you just refinance two or three years from now,” she said.
Even with high interest rates, agents sometimes receive more than 20 offers for a single listing, Venema said. For example, she said people call daily about opportunities to buy in the Ruby Hill community.
“We just received five offers on a $4.795 million home in Ruby Hill,” Venema said “We just represented a buyer in Livermore and that house received 22 offers. We secured the home for our buyers being the highest price with the best possible terms. We recently had two listings in Pleasanton, one received 12 offers and $150,000 over list price and the other received eight offers, $100,000 over list.”
“Keep in mind that the list price today is more of what we call ‘transparent pricing,’” she said, explaining that it’s based on current price per square foot of comparable properties, or “comps.”
Selling a home can be lucrative when inventory is low, and an experienced real estate agent can help you determine the best path.
“When I first meet with a seller, I ask them ‘What's your motivation? Do you want to move and capitalize on the surge we're experiencing? Do you have somewhere to go? Were you thinking of moving this year or next anyway? Then now is the time. Or do you have nowhere to go?’” Venema said. “This will determine the level of motivation for the seller and will help me plan what is best for them.”
She said when homeowners have decided to sell, they will want their house to appeal to buyers – from price to appearance.
“The worst possible thing a seller can do is overprice their home,” Venema said. “Buyers are only focusing on price per square foot in this current market. They don’t want to overpay. If a seller wants to price even 10% over comps, they usually have 50% fewer eyes on their home. Their home will sit on the market. No one wants to feel that they overpaid.”
It's also important to make the home as attractive as possible.
“If somebody called me today and said, ‘Hey, come over for a listing appointment; we want to hire you,’ I would have my general contractor come in, see if there's anything we need to do to current up the home at the best return on investment for the seller.”
After that, a professional stager can help decorate the home, leading to a 6 to 12% higher offer, she said.
The market is also good for buyers. An experienced real estate agent can help buyers be prepared with proof of funds, loan pre-approval and a fair offer.
“If they put their best foot forward at the beginning, that matters to the seller,” she said. “You might not receive a counter from the seller.”
“You want everything to be smooth,” Venema said, “I always strive for a win-win for the seller, for the buyer and for the agents involved. People are buying and selling their highest ticket item in their life. It’s important for everyone to feel good!”