QUESTION for BP-observations on market (Oakland duplex buyer)

[Joe Aamidor]

Hi all,

I'm interested in getting feedback from others on what I am seeing in the market these days. 

We have been looking for a duplex/triplex in Oakland since the start of 2019. We've not seen that much that meets our criteria, but lately, we seem to be seeing more homes getting pulled from the market than selling. 

The process seems to be fairly consistent - a home is listed at an under market price, then 2-3 weeks later (after the offer date) it is raised 30-40 percent. Then the sellers say they are using "transparent pricing" - and our realtor usually can get some details on this from each seller. In general the sellers either don't get offers or they get offers close to ask (while the sellers were expecting a bidding war that would drive the price much higher). 

Then, at the new price, the property sits a few months, and if it doesn't sell, it just gets pulled. These homes may be re-listed in the future, time will tell. 

Is this what others are seeing, too?

My take is that sellers look at what sold last year, and want to sell for even more - but buyers aren't spending it. It seems that prices in general are back to 2017 levels, off the 2018 highs. As a buyer, when I see this, I'm apt to wait on the sidelines until sellers are more realistic. But it's also surprising that sellers can be so opportunistic with selling/not selling a vacant property. We've seen properties that were bought 10 or more years ago at 25 percent current asking price, so it is a bit odd that sellers are holding out for an additional let's say $100K when they already stand to make $500-700K on the sale. But I'm not the one selling a home

Is my take on what's happening accurate? Any other thoughts? 

Just thought others might have insights or experiences to contribute here!

Joe

[Brian Garlington]

@Joe Aamidor     You should get your license :-)    

What we are finding in the East Bay is that residential multifamily is still going at a premium if the property is vacant or if the rents are even close to what market rates are....those are getting snapped up fast and if the asking price matches the comps they are still going above asking in a lot of cases. 

If the residential multifamily has rents that are way below market rate.....and I still see a LOT of those.....and if it's in a rent control city like Oakland and Berkeley and Richmond....then those are still sitting there on the market and will continue to sit because you can't "evict" those tenants (especially right now). Those folks may be open to "creative offers" right now.

If it's a single family home that is vacant those are also going pretty fast, but a number of people that are buying these are doing so to utilize as rentals as a hedge against inflation. Again...if the list price is in line with the comps those are going at around the list price.

If it's a SFH that is still owner occupied....those are the sellers we see as getting nervous because not as many people...including inspectors, appraisers and potential buyers are open to setting foot in those properties and it could be a pain to do a lot of other things. Those folks are probably open to more "creative" offers right now.

Once the shelter in place is lifted here in the East Bay there will definitely be more inventory hitting the market....more so then in years past.....this will create more supply than normally seen.