After bottoming out in late 2011, Berkeley housing prices have risen sharply in the past 18 months, most strikingly in high-end homes with four or more bedrooms.
Some Berkeley homes have sold for up to 150 percent more than their original asking prices, with other houses selling in a matter of days. On average, Berkeley homes have sold in about 64 days this month, compared to about 77 days in the same period in 2012.
The increase — which is driven in part by wealthy buyers coming to Berkeley after being unable to find housing in San Francisco or Marin County — is seen by local experts as part of the normal housing cycle and accentuated by low supply, low interest rates and high public demand.
“There are fewer homes on the market at the moment, so when a house does come on the market, it gets a lot of interest,” said Ira Serkes, a luxury real estate broker in Berkeley who also conducts research on market trends.
“People who have resources are more willing to pay more to get what they want,” he said.
Of all Serkes’ 2012 sales, he reports, 38 percent were paid for in cash — a testament to the high volume of wealthy buyers prioritizing a quick sale over a low price. That same trend has persisted into 2013, with the market becoming more competitive.
In the last 18 months, the median sale price of four-bedroom Berkeley houses has increased by 47 percent, according to Serkes’ market research, an average increase of $400,000. Compared to last year, two-bedroom homes cost $125,000 more on average, and three-bedroom homes have seen an average hike of $71,000.
Marlene Leverette, a broker with McGuire Real Estate, said that because very few new homes are being built in Berkeley, the market relies on the availability of pre-owned homes.
“It’s simple economics — supply and demand,” she said. “We have a huge demand in Berkeley, and we don’t have a large supply. As soon as that changes and we have more sellers, we’ll see the market slow down a little.”
Contact Simon Greenhill at [email protected]