EL CERRITO (KPIX) — Another Bay Area home sold for more than $1 million above the asking price.
A home in El Cerrito was listed for $1.295 million and, after 10 days on the market, sold for $2.45 million – $1.155 million above the asking price.
The house has received 11 offers ranging from $205,000 to $1.155 million above the asking price, according to a Compass spokesperson.
“It was a mid-century modern. The mid-century modern has a following in the Bay Area,” said realtor Kevin Tannahill. “It was a one-of-a-kind house, which is what raised the price.”
Another factor likely to drive the price up, says Tannahill, is strong demand from buyers despite rising interest rates.
“Even with the interest rate hikes and so on, the market seems to remain choppy, just because there’s no supply here right now,” he said.
David Stark of the Bay East Association of Realtors says that in terms of selling price, they are still seeing record prices.
“Buyers are certainly still willing to pay high prices, regardless of what the interest rates are,” he said.
However, Stark sees some signs that could indicate a cooldown is coming.
“In terms of the number of buyers in the market, we’re certainly starting to see some slowdown there. We’re starting to see what I would describe as buyer fatigue,” he said. “The number of outstanding sales – which are offers made in a given month that could result in a sale in the next month – we are seeing this drop a little bit from March compared to April.”
He believes that rising interest rates will also have an inevitable effect on homebuyers in the East Bay.
“We saw what historically low mortgage interest rates did to buyer behavior. A lot of buyers in the market were willing to pay super high prices and raise selling prices,” he said. “So it stands to reason that we will reach a certain inflection point with interest rates where these monthly payments are not affordable or the perception is that they are not affordable and we see buyers starting to back off. see that now.”
But if a downturn occurs, he doesn’t believe it will create a drastic shift in market dynamics.
“Seeing a big shift in market dynamics? I don’t anticipate that,” Stark said. “I think a downturn, where homes can be on the market a little longer and we can see some price stability, that’s the flavor of the market correction I see coming.”
Despite buyer fatigue, Tannahill says sellers remain in the driver’s seat.
“The attractiveness of properties and the distortion of supply and demand are still working very much in favor of sellers,” he said.