Well, Berkeley is pulling it off once again. While the rest of the nation continues to see prices decline, and see houses not sell, our little mecca is holding its own.
This article, posted today in the Daily Californian, explains this further. Several of my colleagues are quoted- kuddos to them for their part in this article.
Daily Californian
By Melody Ng
Contributing Writer
Monday, November 2, 2009
Although the poor economy has caused home prices to plummet nationwide, Southwest Berkeley home prices actually increased while those in the Berkeley Hills have followed the national trend.
A federal tax credit and a high level of foreclosed homes in Southwest Berkeley may be partially responsible for this disparity, according to real estate experts.
Statistics released by the California Association of Realtors revealed the median home price in Berkeley decreased 12 percent from September 2008 to September 2009-compared with a 7.3 percent decrease county wide.
“I believe in Berkeley it’s much more complex than that,” said Tracy Sichterman, a realtor for Berkeley Hills Realty. “It depends on the location, the condition (of the house) and the funding paradigm that fits your house.”
Sichterman gathered data on housing prices for single-family residences in the Berkeley Hills (94708) and Southwest Berkeley (94702) for the same period, which revealed the median housing price in Southwest Berkeley had risen 31 percent while falling 32 percent in the Berkeley Hills.
According to Sichterman, prices for Southwest Berkeley homes may be rising because of current government incentives for first-time home buyers who buy within smaller price ranges.
The federal housing stimulus package, established under the 2009 American Recovery and Reinvestment Act, offers first-time home buyers who earn under $75,000 annually a tax credit of up to $8,000.
“Houses on the lower price ranges are more accessible because of the stimulus package, tax credits (and) lending (that is) more easily obtained,” she said.
High levels of foreclosed homes in Southwest Berkeley in the past year may also account for the increase, according to Cynthia Kroll, senior regional economist for the UC Berkeley Fisher Center for Real Estate and Urban Economics.
“In the Southside area, prices increased from what was an already depressed price,” she said. “In the hills area, you’re seeing prices softening but from price levels that probably held up pretty well until the last few months.”
Bill Fletcher, a realtor for Red Oak Realty, said people who buy homes in the Berkeley Hills are typically already homeowners looking to trade up.
Fletcher added that people living in Southwest Berkeley may not want to sell their homes in the current economic climate, which results in a decreased number of homes available.
“Right now everything is very, very hot,” he said. “Anything that is priced competitively is going way above the list price.”
Tracy Veseley, the city’s budget manager, said the decrease in home sales has reduced city revenue from transaction property taxes generated with each home sale by 50 to 60 percent.
However, she added that the city’s home prices are faring better than many others’ statewide.
“While (the sale values of homes) may be down a few percentage points, I don’t think were seeing the decline in home prices you’re seeing in other areas of California,” she said.
Read the original report here: http://www.dailycal.org/article/107314/home_prices_rise_in_southwest_berkeley