Despite rising rates, East Bay home sells for $1.5 million over asking
EL CERRITO (KPIX) — Another Bay Area home has sold for more than $1 million over the asking price.
A home in El Cerrito was listed at $1.295 million and, after 10 days on the market, it sold for $2.45 million — $1.155 million over the asking price.
The home received 11 offers ranging from $205,000 to $1.155 million over the asking price, according to a Compass spokesperson.
“It was a mid-century modern. The mid-century modern has a following around the Bay Area,” said listing agent Kevin Tannahill. “It was a unique home, which is what drove the price up.”
Another factor that likely contributed to driving up the price, says Tannahill, is strong buyer demand despite rising interest rates.
“Even with the interest rate hikes and so forth the market just seems to keep churning, just because there’s just not the supply here right now,” he said.
David Stark, with the Bay East Association of Realtors, says that, in terms of sale price, they’re still seeing record prices.
“Buyers are certainly still willing to pay high prices regardless of what the interest rates are,” he said.
However, Stark sees a few signs that could potentially indicate a cool-down is coming.
“In terms of the number of buyers in the market, we’ve certainly started to see some slowdown there. We’re starting to see what I would describe as some buyer fatigue,” he said. “The number of pending sales — which are offers that were made in a particular month that could result in a sale the next month — we’re seeing that drop off a bit from March compared to April.”
He believes the rising interest rates will also inevitably have an effect on home buyers in the East Bay.
“We saw what historically low mortgage interest rates did to buyer behavior. A lot of buyers in the market were willing to pay super high prices and run those sales prices up,” he said. “So it stands to reason that we’ll get to a certain tipping point with interest rates where those monthly payments aren’t affordable or the perception is they’re not affordable and we see buyers start to back out. We may actually be starting to see that now.”
But if a cool-down happens, he doesn’t believe it will create a drastic shift in the market dynamics.
“Seeing a big shift in the market dynamics? I don’t anticipate that,” Stark said. “I think a slowdown, where homes may be on the market a little bit longer and we may see some price stability, that’s the flavor of market correction that I see coming.”
Despite some buyer fatigue creeping in, Tannahill says sellers remain in the driver’s seat.
“Desirability of the properties and the supply and demand skew is still very much working in the sellers favor,” he said.
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