Lately, we’ve started to see a “shift” in the Walnut Creek-area housing market. Price appreciation growth has slowed and we are now seeing more price reductions. Home price appreciation has generally declined to single-digit annual appreciation with estimates in the next year of 3-5 percent.
In the 24/680 corridor, homes are sitting on the market longer than they did in the Spring (20-26 days, as compared to 15-20 days). I am receiving 1-3 offers with a final sales price of 4 percent over the asking price on most of my listings.
The Federal Reserve Bank will not increase interest rates this month. Currently, the best mortgage interest rate for a 30-year fixed rate is approximately 3.5 percent. In the big picture, global growth concerns remain the driving force behind the long-term trend toward lower rates.
Kitty Cole, who coaches many Bay Area agents, has noticed two distinct Bay Area markets. Many of them are side by side. Check out her insights:
Some of the market (still a seller’s market) is hot, with low DOM’s, high Sales Price to List Price ratios, low inventory, no contingencies, multiple offers and buyers aplenty. This market is going on in Oakland, Berkeley and surrounding cities.
It looks similar to the last 4 1/2 years. The only thing that is quite different is the number of offers that was 10-25 a few months ago, and is now 2-6 (and occasionally higher). This market requires savvy pricing and negotiating to get your seller the highest price.
The other part of the market (a buyer’s market) has slowed with these factors in place: price reductions (up to 10 percent, and sometimes two before it brings an offer), contingent offers (contingent upon the sale of another property), high DOM’s, few offers (sometimes only one!), expired listings, cranky sellers and demanding buyers (because they can be!).
In the city, one client whose specialty is high-rise condos, literally slowed overnight and now the DOM’s for her listings are more than 30 days. Another San Francisco agent has had three listings expire in the past three months. One agent in the East Bay (Pleasant Hill) is stymied by her listings that sold within seven days and are now sitting for weeks. Many newer agents are not prepared to have the “I need a price adjustment to sell your property” conversation. In three months, it will be different … how, I don’t know, wished I had that elusive crystal ball.
Our newest seller! Congratulations to Todd, on selling your home on San Carlos Ave. in Concord. The home was listed at $400,000 and sold for $460,000. Todd chose to do a lot of things at once: get his home prepared for sale, get married, move out between friends’ weddings, and take a short trip to Palm Springs [I don’t recommend such a busy schedule when selling a home! ;-)]. Now he and his new bride search for their new home together! Wishing you many wonderful memories!
We continue our tour of Walnut Creek’s public art scene with one of the more recognizable sculptures in the city: “Hand of Peace,” located just outside the library in Civic Park. The aptly-named sculpture is a monument to peace by Italian-born artist Beniamino Bufano, who passed away in 1970.
Legend has it that Bufano cut off his trigger finger and sent it to President Woodrow Wilson to protest World War I. He was a peace activist who taught at the San Francisco Institute of Art, UC Berkeley and Oakland’s California College of Arts and Crafts, according to a 2012 San Jose Mercury News story. Bufano has other prominent pieces in the Bay Area, including a sculpture in Chinatown, one at Mondavi Vineyards in Napa, and one at Lake Merced.
According to the San Jose Mercury News article, Bufano originally created the “Hand of Peace” for the San Francisco Arts Commission, but when the piece was put up for sale, developer Bill Swigert paid $50,000 to place the sculpture in Walnut Creek, outbidding Fox Plaza and Ghirardelli Square.
The sculpture sat in an office park in Walnut Creek from 1967 to 2009, when it was taken down for restoration. Now, it’s up for display for many years to come in Civic Park. The sculpture weighs nearly 5 tons, stands 30 feet tall, and is made of copper, mosaic and stained glass.
Oh, and it’s a PokeStop, by the way…
Do you smell that? It must be the eclectic mix of fresh, local dishes and fancy San Francisco-transplanted restaurants that dot the little town of Walnut Creek. It’s no secret anymore: Walnut Creek has become a foodie haven.
In fact, earlier this year, Livability.com ranked Walnut Creek as the 10th-best foodie city, based on the residents preferring independent and locally-owned restaurants over fast food chains (that might explain the disappearance of McDonald’s and Taco Bell over the last few months!).
Also getting a shout-out was The Art and Wine Festival, which draws thousands of visitors every year. From highly-rated stops like Walnut Creek Yacht Club, to the neverending list of new restaurants popping up, Walnut Creek has put itself on the radar among the best food cities in the country.
Is it any wonder that Walnut Creek is getting so much attention for its culinary game when places like Teleferic, Rooftop and Slice House can all pop up within a few months in the same building? A building that is next door to long-time favorites like Tomatina and La Fogata? Just down the block from hip dessert shops like Kara’s Cupcakes and Cream?
Walnut Creek has become an extension of the nearby food meccas of Oakland, Berkeley and San Francisco.
It has become the crown jewel for tourists craving good eats in the East Bay. It may not have any restaurants listed in the Yelp Top 100 nationwide, but the Bay Area has a ton.
So if you are looking to expand your epicurean tastes, check out Open Table top 10 Diners’ Choice Winners for the greater Bay Area. We are so lucky to live in this beautiful place and taste the bounty of menus it has to offer.
Fringe Flower Co. in Walnut Creek is not your typical flower shop. With their unique designs, highly-green approach and free delivery to the nearby Kaiser hospital, Sarah and Jeanne do everything differently.
Last year, they founded it and opened up Fringe next to George’s Giant Hamburgers. And now, they’re really in business.
Both Sarah and Jeanne are from the Bay Area and are committed to a holistic business. They source their florals from premium flowers and local growers. Additionally, they work with recycled containers, compost, and deliver leftover florals to community groups, among other philanthropic efforts.
If you ever need a floral arrangement for an event or a wedding, make sure to give them a call! Deliveries can be made online, over the phone or via walk-in, and Fringe specializes in weddings, events, and corporate accounts.
They are open Tuesday-Friday from 10 a.m. – 6 p.m. and on Saturday’s from 10 a.m. – 5 p.m.
For the 24 years I have lived in Walnut Creek, there have been no public 4th of July fireworks displays. According to the Contra Costa County Fire Protection District, fireworks are illegal in the county, so good luck trying to put on your own show!
However, you can buy fireworks in Alameda County – Dublin is not that far away – but with the drought, the law is probably a good thing to abide by.
Luckily, some cities close by are shooting off fireworks, so grab a spot on a hill, go to the location itself, or maybe a friend has a bird’s eye view from their house:
- Antioch – Contra Costa Fairgrounds (Dusk)
- Benicia – Benicia City Park (9:00 p.m.)
- Berkeley – Berkeley Marina (9:30 p.m.)
- Concord – Mt. Diablo High School & Todos Santos Plaza (9:00 p.m.)
- Livermore – Downtown (Dusk)
- Martinez – Waterfront (9:30 p.m.)
- Moraga – Moraga Country Club (Dusk)
- Pittsburg – Pittsburg Marina (Dusk)
- Pleasant Hill – College Park High School & Pleasant Hill Country Club (9:10 p.m.)
- Pleasanton – Alameda County Fairgrounds (9:30 p.m.)
- Richmond – Marina Bay Park (9:15 p.m.)
- San Ramon – Central Park (9:30 p.m.)
Have a safe, happy 4th of July!
As promised, I said I would write a couple of blogs from a Carol Rodini speaking event I attended. The first blog gives her thoughts on how China and Saudi Arabia may affect the real estate market in the coming months. Today, we’re discussing a general Bay Area real estate overview.
Carol said that we (in the East Bay) are usually 6-8 months behind the other side of the Bay – meaning San Francisco and the Peninsula. What is currently happening there (and we may see this in the later part of the year) is that the media is reporting a growth of inventory. This type of news has adverse effects on real estate. In reality, there are two types of real estate: desirable and non-desirable. The media bundles them together, but Carol pointed out how they are different.
Prices have gone down on high-end properties, and buyers are getting hesitant and willing to stand by and watch what happens. For example, a house in San Francisco that was listed for $1.5 million sent out 30 disclosure packages. One buyer submitted a pre-emptive offer of $1.75 million all cash and the seller didn’t take it because they thought they could get more and wanted to market it a bit longer. On the offer due date, none came in. So they went back to the cash buyer and that person said no.
A few takeaways:
1. You can’t be over-priced in this market.
2. Buyers in the city are no longer playing the competition game.
3. Sellers need to be aggressive with their pricing, by pricing it slightly under market. The reason? Millennials buy with their stock options. And with the market volatility and changes, this is making them a bit more hesitant.
The East Bay will have a great spring. We traditionally see a bit of a slow-down in the summer, and depending on what the stock market does, we may follow in the steps of the city. Our average price point is much lower and we are seeing a bunch of first-time home buyers that can’t afford San Francisco or the Peninsula who are looking at the East Bay – at least until the prices drop on the other side of the Bay.
The idea of saving enough money for a 20 percent down payment to buy a home in the Bay Area can be a daunting thought, especially because our average prices are so much higher than the rest of the nation. How can 20 or 30-something’s save that much money and still afford rent and basic living needs?
I posed this question to my favorite lender Jay Voorhees, Co-Owner at JVM Lending.
“Buyers often need less money than they think to buy a home, as long as their loan amount is lower than the conventional and FHA maximum of $625,500. Buyers can either take advantage of FHA financing and buy with as little as 3.5 percent of the purchase price for a down payment, or with conventional financing, purchase with as little as 5 percent down. Both options above, however, require mortgage insurance, or an additional fee that borrowers have to pay every month when their loan-to-value ratio is over 80 percent.”
What does that mean from a real estate perspective? With interest rates and inventory low, it means you will probably be competing for a property. The good news is most buyers will have similar financing; however if one has 20 percent down or all cash, that may be the deciding factor on whom the seller selects.
What can buyers do to avoid mortgage insurance? According to Jay, put down 20 percent, or 10 percent down and get a second mortgage on top of their first mortgage (“80/10/10” financing). This option requires excellent credit and very low “debt ratios.” Jay says that many borrowers are forced to use FHA financing no matter what because FHA is much more flexible with respect to credit and debt ratios.
Jay had a couple final thoughts on the topic:
“Buyers can also get gifts from relatives to use for down payment funds or closing costs. Buyers cannot use borrowed funds for a down payment. Whoever provides “gift funds” will have to provide a signed “gift letter” attesting to the fact that the funds are in fact a gift.”
“The total closing costs for a purchase can range from $6,000 to $18,000, depending on the type of loan, the loan amount, and the place of purchase (some cities have high “transfer taxes”). If gift funds are not available and buyers are tight on cash, they can, however, ask their lender to increase their interest rate in exchange for a credit to cover some or all of their closing costs.”
If you have specific questions or would like to discuss your options and want to speak with JVM Lending, call them at (925) 855-4491 and ask for Jay, Heejin (both owners), or one of their talented associates. They are in downtown Walnut Creek at 1850 Mt. Diablo Blvd., Suite 530. Give them a call and and tell them you saw this blog on WalnutCreekLifestyle.
On January 11, I attended a speech by Carol Rodoni about the Bay Area real estate market with an emphasis on the East Bay. My blogs are going to spread out over a handful of posts to give bite-size tidbits of her speech, which I always find very entertaining:
China devaluing their currency:
Carol sees this move as a growing pain and a way to try to support their economy. Every Nov. 11, China celebrates “Singles Day,” the biggest on-line shopping day of the year. Nov. 11, written out as “11/11,” represents four singles, which is also referred to as “Double Eleven.” This past November, Alibaba broke its own record and increased sales by 60 percent, or $14.3 billion. By comparison, American sales on Cyber Monday were $1.35 billion. I don’t think we need to worry about China.
Middle East and the price of oil:
Oil now costs less than $27 per barrel and is still dropping, when only a few years ago it was $109 per barrel. Saudia Arabia has refused to cut down production, perhaps in the hopes of pushing out a few competitors. Saudi Arabia has a tremendous advantage, as their technology to extract oil is inexpensive compared to other countries; this includes the U.S., where fracking has become a provider of jobs in the Midwest. Saudi Arabia may be okay with lowering prices to eliminate smaller competition, like Iran, now that oil sanctions have been lifted.
As a result of how chaotic the world is, Carol doesn’t believe the Fed will raise rates more than twice in the next year. She said she believes the next rate hike won’t happen until June, and felt the hike in December was at the wrong time. All this still makes for a great time to purchase or refinance as rates are still hovering below 4%.