Higher Rates, Higher Offers: What September Showed in the East Bay
The regional report talked about affordability. The inner East Bay talked about 139 percent of the list price.
Mortgage rates climbed this fall to levels we haven’t seen in years, and the Bay Area’s third quarter report said what you would expect it to say. Affordability is pushing back, especially on lower-priced homes. Then September closed, and Berkeley homes sold for an average of 139 percent of list price.
What the Regional Report Says
The broader Bay Area numbers describe a market with very little room to move. Inventory was down 5 percent from a year ago, with sharp summer drops in both Alameda and Contra Costa counties. Homes sold in about 33 days on average, and roughly half closed above asking. The report also noted that sales of lower-priced homes slipped, with Alameda County among the places where that decline was largest.
That’s a fair summary of the region. It isn’t much help if you’re deciding what to offer on a house in Albany or what to ask for one in Orinda.
Inner East Bay: Competition Didn’t Blink
Across the seven inner communities, sales rose 0.8 percent to 260, the median price climbed 8.7 percent to $1,310,000, and the average list-to-sale ratio reached 122 percent. Rates went up. Offers went up with them.
Berkeley led. Fifty homes sold, up 42.9 percent from last September, at a median of $1,787,500 and that 139 percent ratio. Piedmont closed 13 sales, up 62.5 percent, with a median of $2,800,000 and a ratio of 132 percent. Albany and Kensington posted the highest ratios of the group, 143 and 144 percent, with medians up 32 and 41.1 percent. Both are very small markets, seven sales in Albany and six in Kensington, so one or two unusual homes can move those percentages a long way. The direction is still worth noting.
Oakland was the more interesting test of the regional report’s warning about lower-priced homes. Sales slipped 6.3 percent to 148, but the median still rose 1.9 percent to $950,000, and the average ratio came in at 115 percent, up 8.5 percent from a year ago. Fewer homes sold. The ones that did still drew offers above asking.
Alameda was the one inner community that cooled. Sales fell 36.4 percent to 21, and the ratio eased to 108 percent. El Cerrito’s ratio also pulled back, to 124 percent, though that’s hardly a soft number.
The Outer Corridor: More Sales, Softer Prices
The outer communities moved the other way. Combined sales rose 7.5 percent to 157, while the combined median slipped 1.7 percent to $1,695,000. The average ratio across the group was exactly 100 percent of the list price.
Danville closed 49 sales, up 22.5 percent, at a median of $1,888,000, down 10.3 percent, and a ratio of 98 percent. Pleasant Hill sales rose 50 percent to 21, with a median down 7.7 percent to $1,205,000. Lafayette held more evenly, 25 sales and a median up 4.3 percent to $1,930,000, with homes selling right at list. Walnut Creek did the reverse of Danville, with sales down 10.3 percent and the median up 8.6 percent to $1,602,500. Orinda had the softest month of the group: sales down 28 percent and a ratio of 96 percent.
In smaller markets a single month can swing on which homes happened to sell, so I wouldn’t read too much into any one town. The pattern across the corridor is more telling. Buyers are showing up in numbers. They are not bidding against each other.
What This Means Heading Into the Last Quarter
If you’re selling in Berkeley, Piedmont, Albany, or Kensington, September’s ratios say competition is still doing much of the work - especially above the $1.5m mark. Preparation and presentation matter most here, because a home that’s ready pulls in more competition.
If you’re selling in Danville, Orinda, or Pleasant Hill, price to current value from the start. A ratio at or below 100 percent means the market will not correct an optimistic number for you.
If you’re buying in Berkeley or Piedmont, know the gap between list and sale price in your specific neighborhood before you write an offer. If you’re buying in Orinda or Danville, ratios of 96 and 98 percent suggest there is still room to negotiate, and it’s worth using while it lasts.
Bottom Line
Rates went up and the regional report asked whether buyers would pull back. In parts of the East Bay, they did not. In others, they came back in greater numbers and still negotiated. Two groups of towns, two different kinds of confidence. The region described the pressure. The neighborhoods showed who was feeling it.
-Alex
