The asking price for a Berkeley home only hints at the actual cost of buying one. That’s no secret.
But a new report from Realtor.com looked at data from January to March and found that Berkeley houses actually sold higher above asking price — about 19% more on average — than anywhere else in the country.
The real estate company looked at data from almost 1,500 cities during the first three months of the year, comparing final sales prices to last-known list prices to compile its list. Montclair, New Jersey, came in second, with an average increase over asking of 14%. Champaign, Illinois, was third, at 13%.
From April to June, the average percent that homes sold over listing in Berkeley only continued to rise, according to data provided by Aman Daro, COO of Red Oak Realty. Berkeley homes sold an average of 27% over list price in the second quarter, the highest since at least 1997, Daro said. It’s unclear whether that’s still the highest in the country.
The Realtor.com report attributed the phenomenon in Berkeley to remote-work-eligible San Franciscans fleeing the city and real estate agents pricing homes below what they expect they can get in order to drive up competition. “It’s a pricing strategy that encourages as many buyers as possible to compete for a home,” Daro said. “This is how this world works in the inner East Bay. [Buyers should] plan to spend 20% to 30% over asking.”
Alison Teeman, co-owner of the Berkeley real estate appraisal company Yovino-Young, told Berkeleyside in April that other factors contributing to the stratospheric Berkeley real estate market include a far-too-low housing supply, low interest rates and an influx of all-cash buyers ready to spend money during the pandemic. “I don’t think I have ever seen the market as overheated,” she said.
The median price of a Berkeley single-family house was $1.497 million in the first quarter of 2021, according to Daro’s data. It jumped to $1.625 million in the second quarter, a 229% increase since 2010.
Daro said this spring that Berkeley home prices have been rising since 1996 because the “buyer/seller ratio has been out of whack for years” and that he doesn’t expect the bubble to pop anytime soon.
A three-bedroom home in the Berkeley Hills, listed in March for $1.15 million, got 29 offers and sold for $2.3 million. A two-bedroom bungalow in the Thousand Oaks neighborhood, listed for $1.25 million, sold for $1.835 million. Another home near Ashby BART reportedly sold for $2.25 million on a list price of $1.3 million.
This story was updated after publication with new information.