As we climb up the walls of the market canyon after several years of darkness, we are struck by the blinding brightness of the sun and a healthy real estate market! Ok… perhaps that’s all a bit melodramatic, but this year does feel a bit like an old Stanley Kubrick sci-fi movie! I don’t think I ever expected to see a 2012 market quite as wild and crazy as this one has been. To put matters immediately in perspective, as of this morning, there are only 56 active properties on the market in the world of Lafayette real estate, and there are 52 presently pending in escrow. Essentially, we have only one month of available inventory, which explains the wild and crazy ride that many of us have been on in this business. Even though I went on record months ago stating that I believed we would look back and see that the housing market turned up this year, let’s be clear… the “housing crisis” is over. Even the most critical national real estate pundits are finally having to admit that we’ve finally climbed out of the “canyon”.
So, what’s life like, post housing crisis? After being in hibernation for 4+ years, the buyers have awakened with a fierce appetite for homes, and there aren’t enough tasty properties to go around. As a result, welcome to “multiple-offer city” — the new world of Lafayette, CA real estate. The hunger to buy real estate is not evenly distributed across all price points, rather it seems to be fiercely concentrated in the sub-$1.2M market. We’ve had three listings on in the last month within this price range, and all have sold with 4+ offers. The craziest was our recent one at Attri Court in Lafayette where the property went on the market a weekend ago at 1pm Saturday. Between that Saturday afternoon and 6pm on Sunday, 27 real estate agents had shown the property!!! That was coupled with an open house where over 150 people showed up… stacking cars up 6+ deep in the court, and out onto Reliez Valley Road. Our client called us at 6:30 PM and told us that people were still showing up at her door, long after the signs were taken down!
We had no idea what to expect as we accepted offers this past Friday. Clearly, the furious level of activity caught many buyers off-guard, and they became hesitant to engage in what they believed would be a frenzy of offers. As it turned out, we received 4 offers, and an experienced, professional agent properly coached her clients about what they needed to do to buy the home without over-paying for it. The process demonstrated that we are in a transitional period of the market, with the delicate balance of power shifting to sellers in the most affordable price ranges.
As a buyer, it is clearly a difficult time… much more so than I would have predicted. While I admit to getting “scooped” on the “multiple offer” story by the Contra Costa Times over the weekend, while much of this post lied dormant in “draft” mode on Word Press, I did go on-record months ago correctly calling the market turn-around this year. After 3-4 years of a recessionary market, it’s going to take at least a couple of months for buyers to learn that retrospective “comps” are no longer an indicator of market value — particularly when those comps were from before the market reignited.
Stay tuned as we take a look at what’s going on up-market in the days ahead. Fasten your seat belts… 2012 could be an interesting ride for Lafayette, CA real estate and the greater Lamorinda real estate market!