Oakland named one of the top 20 “Best Towns In America”

The most recent edition of Outside Magazine names the city of Oakland as one of the top 20 places to live, and even features our fair city on the cover.  Here is a scan of the magazine’s August, 2008 cover:

Cover of the August, 2008 edition of Outside Magazine

You can read the actual article here.

Enjoy!

How to sell your house in a down market

I ran across an interesting article this morning in the Wall Street Journal.  It details seven points to keep in mind if you are forced to sell your home in this down market.  Check it out here.

What’s with the East Bay real estate market anyway?

Today’s East Bay real estate market is truly a strange one.  On the one hand, houses in Montclair, Rockridge, Broadway Terrace, Berkeley Hills, etc, are continuing to sell within 30 days and often at or above asking price.  The Oakland flatlands, however, are a completely different story.  Oakland currently has 607 active listings that are either short sales or bank owned (aka REO) properties.  The median price of these homes is $249,000 and the average days on the market is 79.

In contrast, the Montclair and Rockridge zip codes, 94611, and 94618, have only 11 short sales or, bank owned listings.  Median price for these listings is $649,000 with an average days on market of 42.

Talk about a tale of two cities!

What does this mean for you if you’re trying to sell your house in the Oakland flatlands?  It means you are competing with a LOT of REO and short sale properties.  If you bought or refinanced your house in the past 5 or so years, you are likely to owe more than the house will probably sell for.  Its a sad situation, but it is the reality today.  Until this bubble of REOs and short sales moves through the market, things are unlikely to change.

How long will it take?  No one knows for sure.  In 2007 there were 2,424 total home sales in Oakland.  Currently there are 1891 active listings.  Based on these numbers, the current supply of housing on the Oakland market represents a little over a nine month supply.  Only time will tell how long it will take for the current crop of these underpriced properties to move through the sales cycle.

The frustrating part of all this is that as the banks try to dump properties they likely should not have made loans on in the first place, they are driving down the price of houses for those who are still paying their mortgages. It stands to reason that as prices continue to decline in these neighborhoods, more and more homeowners will default on their loans making this a vicious cycle that may take a long while to correct.

So, what is the moral of this story?  If you are forced to sell your property in one of the areas hit hard by foreclosures, you need to be prepared to compete with these currently listed bank owned properties.  For an area-by-area breakdown of sales volume and median prices of homes within each zip code, check out DQ News.

You may want to consider renting your property if you’re able to do so.  Rents have increased in the past few months, and the clients I have been dealing with have had no shortage of renters applying for their homes.

In short, the situation today reinforces that old adage of real estate:  Location, location, location.