Rockridge Real Estate: 2013 Review

Saturday, March 8, 2014

In reviewing real estate statistics for 2013, we are happy to announce that Rockridge home values have clearly returned to pre-recession levels. In fact, we have recovered better and more quickly than most other neighborhoods in Oakland or Berkeley. It seems that, despite our endemic urban problems, Rockridge retains its appeal as a vibrant premier residential neighborhood in the East Bay.

Much of the popularity of Rockridge can be credited to a unique blend of natural attributes of the area. We enjoy excellent climate and a natural setting. Location, yes, but people, too, make the difference. The general respect for the Arts and Crafts heritage has preserved a friendly, small-town atmosphere and relatively open spaces even though the population density resembles that of nearby more urban environments.

Neighborhood streets are walkable, lined with attractive historic cottages. College Avenue supplies a lively restaurant and shopping scene as well as an easy commute to the City and UC Berkeley. There is also good availability of necessary services, such as hospitals, public transportation and public and private schools. All of these factors help to make this a great place where people want to live and raise their families.

Market Analysis
It is safe to say that the area has made a real recovery, one that will last. It is hoped 2014 will finally bring us a sane, more balanced housing market.

The number of homes sold in Rockridge in 2013 rose to levels experienced before the recession: 122 homes and a good 30 percent over the previous year. It is hoped that number will rise even higher in 2014.

With mortgage rates still at historic lows and the presence of a large number of cash buyers, it would not be surprising if overbidding were the norm again this year. In 2013 the average increase over list price was about 10 percent, but a whopping 83 percent of the sold prices were up to as much as 30 percent over asking. More homes on the market would help to keep prices more realistic and in line with affordability. Nobody wants to see another bubble.

What's different about the 2013-14 market? Cash purchases are the wild card. They have the advantage of by-passing the appraisal contingency and assuring quick and easy closes. In 2013, 30 percent of buyers purchasing two-bedroom homes in Rockridge did so with cash, skewing the market numbers. Cash buyers won't go away soon as long as the tech industry keeps going strong. In fact, to accommodate cash buyers, new mortgage banking programs are available that allow a conversion to a mortgage within a narrow window after the purchase has been completed.

Is this going to cause another meltdown or a bubble? Not very likely. The good news is that new banking regulations seem to be working. There is real money behind those sales. Will there be a ceiling on those rising home prices? Most forecasts say yes, since salaries are not rising to keep pace and economic uncertainties still abound worldwide. But here in Rockridge, San Francisco's burgeoning tech industry and high housing costs need to be factored in. 2014 will be a good year.

What Your Home Is Worth
Here is an update from the previous year. Criteria for evaluating a home differ greatly depending on the overall profile of the home. It is best to work with your local realtors, appraisers and mortgage brokers to get a proper evaluation. However, you can get a good snapshot yourself by going to open houses of homes of similar size, condition, amenities and applying a per square foot measure to your property.

Today, a good measure for a well-maintained two-bedroom bungalow (about 1,222 sf.) would be about $650 per square foot, considerably higher than last year. A good average measure per square foot for a medium sized (1,855 sf.) three-bedroom home is about $544, but it is likely your home could fetch a much higher price based on its appeal, condition, scarcity and location. Four-bedroom homes (about 2,695 sf.) sold at an overall average of $456 per square foot in 2013, but homes of four bedrooms or more tend to be much larger, newer homes or historic homes that traditionally fetch prices well above that depending upon the total number of bedrooms, the overall size and desirability of the home.

Whether it is new or old, worth a lot or not so much, enjoy your Rockridge home.

This analysis covers Rockridge single-family-home sales from the Berkeley border in the north, south to Broadway Terrace and 51st Street, west to Telegraph Avenue and east to Highway 13. Information supplied by East Bay Regional Data (EBRD) for 2013 is deemed to be reliable but not guaranteed.

Ortrun Niesar is a realtor with East Bay Sotheby's International Realty: ortrun.niesar@sothebysrealty.com.