According to the latest Case Shiller Home Price Index, prices have gone up 5.5% over the past year. Increases have been reported in 19 out of 20 metropolitan areas. Continued appreciation is expected over the next five years.
After reaching record lows in 2012, mortgage rates are expected to increase to 4.4% in 2013, according to the Mortgage Bankers Association. In the past few months, rates have increased by about 2/10 of a point.
Over the past year, rents have skyrocketed across the U.S. Zillow reports an increase of 4.2% in general, with increases reaching more than 5% in major metropolitan areas such as San Francisco and San Jose.
Regulators are currently drafting the new Qualified Residential Mortgage (QRM) rules. The new rules are expected to be more stringent for two major requirements: minimum down payment and minimum FICO score.
In our local Berkeley/Oakland market we are seeing housing prices return to 2007 and 2008 levels. If you are a homeowner who has been waiting for the market to improve before you sell, now may be the time. If you are a prospective buyer, you may want to consider buying into a stabilized housing market before interest rates rise.
During the month of June, on average, properties in our North Berkeley neighborhood sold for $495 per square foot. These properties were in contract in 11 days, on average, and sold for 8% over their asking price. Below is information for our recent sales.
|1436 DELAWARE STREET
|1361 NORTHSIDE AVENUE
|2016 VINE STREET
|1739 McGEE AVENUE
|865 COLUSA AVENUE
|1719 BUENA AVENUE
|1505 EDITH STREET
|1581 SAN LORENZO AVENUE
|1538 M.L.K. JR WAY
|1866 SAN PEDRO AVENUE
|1967 EL DORADO AVENUE
|2201 ROSE STREET
|593 THE ALAMEDA
|845 CONTRA COSTA AVE
If you are considering selling your home and would like to better understand your home’s current market value, you are welcome to give me a call. I would be glad to assist you in evaluating your home’s potential sales price.
When reviewing private school vs public school options, know the math. Conservatively, the current cost of private school for one year, for one child is $20,000 (in post tax dollars). If you are in a 30% tax bracket, that means you need to make approximately $28,571 in order to pay that $20,000 in tuition.
Here’s where the numbers get interesting… presuming you are sending your child to private school for 13yrs (K-12), and that private school tuition will increase 3% a year, by the end of the 13th year you will have paid $446,223 in tuition (this doesn’t include money donated to special funds or fundraising events, btw). If you have two kids, that number is $892,445. Three kids? Forget about it.
If you took the same amount of money that you would have spent sending two children to private school for 13yrs and instead invested it at a conservative rate of return of 5%, you would have $1,143,595 at the end… For your retirement? For their university education?
For more information on the average expenses of sending your child to college, see this link from CNN: http://money.cnn.com/2011/10/26/pf/college/college_tuition_cost/index.htm
This from the Brookings Institute, an independent research and policy institute in Washington DC. “Across the 100 largest metropolitan areas, housing costs an average of 2.4 times as much, or nearly $11,000 more per year, near a high-scoring public school than near a low-scoring public school. This housing cost gap reflects that home values are $205,000 higher on average in the neighborhoods of high-scoring versus low-scoring schools.”
For Berkeley Public School System see: www.berkeleyschools.net
For Oakland Public School System see: http://www.ousd.k12.ca.us
For more information you may also research school information at www.GreatSchools.org and the Berkeley Parents Network at http://parents.berkeley.edu (a great resource for all kinds of East Bay information)
Berkeley Housing Market Insights
The Berkeley residential housing market experienced an increase in the number of total home sales and an increase in the average price of properties sold in May 2012 compared to the month of May last year.
Total number of sales for the month of May increased 24% year over year and the average sales price increased 7.7%.
Data Source: Data from the MLS, Analysis by Carrie McAlister. (Click Charts to Enlarge)
Sharing Local Market Insights
Over the last decade, in the process of helping my clients evaluate the local real estate market, I have spent hundreds (if not thousands) of hours tracking real estate sales in neighborhoods throughout the East Bay. Most of this analysis now lies hidden deep within folders and in multi-layered excel spreadsheets, somewhere on my hard-drive. No longer!
Through these blog posts, I will share the stories uncovered in my data and housing research with buyers, sellers and investors who may find the information in some way beneficial to their own real estate endeavors. And, as the opportunity presents itself, I suspect I will find myself sharing my experiences and the current goings-on in the marketplace as well. Welcome ~ and enjoy!