The Mostly Real Estate Podcast, with Declan Spring

#61 - Aman Daro - Decoding the Inner East Bay Housing Market: A Mid-Year Analysis

• Declan Spring

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What happens when data nerds dive deep into the Inner East Bay real estate market? Aman Daro, Director of Operations at the Grubb Company, returns to the podcast armed with comprehensive MLS data that reveals surprising trends shaping our local housing landscape.

The numbers tell a fascinating story of market bifurcation. While homes priced below $500,000 struggle to maintain value (selling 7% below asking on average), properties in the $1-2 million range are thriving at 22% over asking price. Even more striking, the luxury market above $2 million is performing exceptionally well, defying conventional expectations during economic uncertainty. This pattern suggests wealthy buyers may be viewing real estate as an inflation hedge, while entry-level segments face greater challenges.

Geographic variations paint an equally compelling picture. El Cerrito has emerged as one of the region's hottest market with the lowest months' supply of inventory. Berkeley continues its remarkable stability, now boasting the highest 20-year appreciation rate in the Inner East Bay. Meanwhile, Oakland and Richmond show strong performance in desirable neighborhoods despite higher cancellation rates. The condo market tells a different story, with median prices down 12% year-over-year and significantly longer days on market.

Aman also tackles controversial topics like private listings versus MLS exposure, sharing data that homes sold off-market typically achieve lower prices than those with full market exposure. For both buyers and sellers, this conversation offers invaluable insights into timing strategies, price point considerations, and neighborhood dynamics that could significantly impact your real estate decisions in this unique East Bay market.

Connect with Aman at adaro@grubbco.com or explore more local real estate content through The Home Factor's weekly Substack newsletter at thehomefactor.com.

Aman Daro is a licensed CA REALTOR® DRE# 01350412

Declan Spring is a licensed CA REALTOR® DRE#01398898

Declan:

Hey, eamon, welcome back to the podcast. I am so grateful you're here and it's been a little while. So, first off, how are you doing? I'm doing great. I haven't seen you since late last year. I'm glad you're well. Thank you, you look well. Thank you very much, and I've been kind of blessed recently with repeat guests to the podcast. I've had Andrea Gordon on, who was my very first guest, and that was great. Felicia Marisvilla, rachel Melby, was on recently.

Declan:

Now, listen, my first conversation with you, believe it or not, was all the way back in October 2020, and that was episode number five, and we did a deeper dive into your bio then. That I'm going to do today, but if anybody wants greater insight into your background, they should definitely go back to episode five. And then after that, we did this is amazing to me we did episode 10, 17, 21, 25, 30, 34, and 38. And then you unfortunately fell off my radar when I moved from Red Oak Realty over here to Keller Williams. But consistently, our conversations center around your deep insight into quarterly MLS data specific to the Inner East Bay and what is reasonable to extract from the data, and I've always enjoyed our conversations so much. So you've moved on from Red Oak as well, and I want to shout out and say thank you to DJ Grubb. I'm sure you let him know you were coming over here and I really appreciate that he's good at that because this data, honestly, without the conversations with you, I didn't have anywhere else to get this kind of data.

Declan:

So I'm kind of excited to see what you're going to tell me. I want to mention one other thing, though, with you know repeat guests. So I know you're a fan of East Bay Yesterday podcast. All right, you're going to like this. So Liam O'Donoghue is the host of East Bay Yesterday. I love the show and listen to every episode.

Declan:

Liam is going to be here at the office next month. He's going to come here August 7th and we're doing a live audience podcast downstairs in the big room with a Q&A and we're going to do a deep dive into some select episodes of his East Bay Yesterday podcast. So I want to get like maybe 30 to 40 people in here that day. So hopefully you can spread the word to anyone in your sphere who might be interested in being here and, if it's not abundantly clear to anyone listening to the show today, I'm inviting you please consider coming in here August 7th at around 3 pm. We're going to have some snacks, courtesy of Evelyn Freitas, at guaranteed rate, and the information will be super relevant to anybody who's interested in Oakland history. So RSVP if you can. But thank you for letting me mention that because I'm very excited about that.

Declan:

Okay so let's talk about data. I, whenever we chatted before, I always had the benefit of reading through a whole stack of data. So I could kind of get myself ready and ask questions, but I have a blank piece of paper in front of me today. So let's first of all okay, let's talk about your current situation professionally, because, as I said, you moved on from Red Oaks. What's going on?

Aman:

Good question. So I'm the director of operations for the Grub Company and my responsibilities primarily involve managing and kind of rethinking the marketing and technology suite that Grubb offers. So we're kind of actually taking a pretty hard look at everything and really bringing us to the future. It's pretty exciting.

Declan:

I mean, it must be an exciting time for a person like you with a background in marketing and tech, now with all of this AI stuff which came kind of honestly, came just rushing out of nowhere really a few years ago, and and so are you excited about all of that?

Aman:

Yes, I, it's so hard because you know I'm let's just say I'm middle aged. I guess you could say yeah, to say it nicely, and I don't want to be anti-technology by any extent. I do think that you have to be open to change and try new things, and I've certainly been exploring AI and doing as much reading as I can and using it as much as I can, but I do think that there is some over-promise and under and I think it's really good at giving summaries and information. That is, in a lot of cases, kind of middle of the road, yeah, but in terms of real innovative thinking or really processing information, I really think humans are still pretty good at that.

Aman:

Now, how long that will stay the case, you know? I just think that we have to be very cautious about how to use it, but also pay attention to who's pitching those AI services. Very often it's people who will benefit from you using those services, right? Yes, so I think you should always move forward with a healthy dose of skepticism and really understand what you're getting and what you're taking away by using it. So I've benefited from it specifically, yes, but it's been very helpful to understand what it can and can't do you know.

Declan:

here's the thing, though, is it came, as I said, rushing almost out of nowhere about three years ago or thereabouts. I mean, ChatGPT was kind of a fully formed thing that just kind of dropped on us, and there have been iterations and it gets better and better you know, everybody, of course, is poking holes in it and seeing the flaws, but at the same time the speed of it oh, it's incredible, right so like we complain about this, that or the other, but our complaints, you know, I just think, two years from now, oh, who knows.

Declan:

You know what I mean?

Aman:

it's just the speed of yeah, it just shows. You really have to understand it, you really have to use it and make your own decisions, and that decision may need to change in six months, you know, and a whole new product may come out.

Declan:

Yeah, Are you using GPTs? Because that's something that I kind of like and it's a bit of a closed loop of info. And it's like your own sort of private llm yeah, I haven't been using gpts.

Aman:

I've been using notebook lm, um in that kind of I think that's a rag kind of profile. Yeah, um, and that's worked for me in in many instances and I've been encouraging more people to use it.

Declan:

So yeah, yeah, and will you incorporate it into the tech that you're the tech stack for grub I'm you know, don't give anything away, obviously.

Aman:

Yeah, yeah, well, we actually just launched with close okay, which is a crm, and it uses ai pretty heavily within it, so it puts a lot of guardrails in place and it really helps deliver relevant, actionable information. Um, you know, and I also I do teach about how to use, say, chat, gpt, you do, and yeah, and like how to do a lot of very helpful things, that kind of take yourself out of the center of the conversation, really think about your audience and how to talk to them and what they need, right. But I think there's still, I think the world is still dealing with kind of a learning curve around that, which is exciting, it's new, it's different and it's foundationally a change in our environment.

Declan:

Well, we're halfway through the year, so maybe I don't know who you've got today.

Aman:

What's your plan? What are you going to tell me? So what I have with me is basically a complete data set of the MLS, and it's for internal purposes, for us to kind of understand how things have changed over time. That's really what this is really good at, and so, yes, we have a snapshot of the first half of the year, but it also helps us understand how that half of the year is different from previous half years and how things have changed, and maybe that will help us understand how things are going to be moving forward. I've got goosebumps.

Declan:

I'm very excited and maybe that will help us understand how things are going to be moving forward. I've got goosebumps, I'm very excited and I also—.

Aman:

Fellow data nerd, I love it.

Declan:

By the way, do they call you the data guy that grew up?

Aman:

Not yet, Not yet yeah, maybe I'll get that name, maybe not, we'll see.

Declan:

Okay, okay, I just had one other thought. That's just something that's been on my mind today this pressure on Jay Powell. We're seeing this inflation begin to occur and the economists generally speaking, most economists seem to conclude that this is likely the beginning of a trend of inflation due to the tariffs we're just starting to. It's just starting to kick in, and whether or not Trump fires or somehow manages to dispose of Jerome Powell and put in place his own sock puppet, either way Jerome Powell's out of that seat May next year, and so let's just say he continues on, he manages to survive till May next year. You know, the sock puppet after that is going to be somebody loyal I think, is the word loyal to Trump and, if we have, if the inflation is just starting to really get going in 2026, holy crap I mean you know that's when you really need Fed policy that works and it's.

Declan:

it's always going to be, contrary to whatever president is sitting in the Oval Office. They never like what happens in a difficult economy. They never like what the Fed does. All of this is to say, is like kudos to you for trying to articulate anything you're seeing in the data, but we won't get ahead of ourselves in any way, shape or form.

Aman:

All right.

Declan:

So what's going on? I'm going to try and keep my mouth shut and take notes.

Aman:

All right, I'll do what I can. I'll try to start with some broad brush points that I've taken from the analysis than if you wish to stop and dig deep a little bit. I'm happy to do that. Okay, so the first place we usually start is understanding the supply and demand of homes in the inner East Bay, and really we're talking about Richmond through Oakland in this case, okay, because we're starting with a fresh data set.

Aman:

I have a snapshot back to really the beginning of the year. Okay, there's really two things that we're seeing right, a fresh data set. I have a snapshot back to really the beginning of the year. Okay, there's really two things that we're seeing right now. One is that number of homes for sale that are coming on the market each week is declining, and that's exactly what we would expect in the summer. Okay, so it's right, okay.

Declan:

Perfect.

Aman:

Yeah, and so I don't see a big drop-off in number of new listings. I don't see a huge change in the number of pendings, but I will say in regards to that that June was a surprisingly strong month in terms of sales. Okay, a different data set, but we'll talk about that in a minute. I don't want to get too far ahead of myself. Okay, with that information, we're able to determine what's called a month's supply of inventory, and essentially what this says is, if you take the current number of homes for sale and then you take the number I think it's an average of the number of homes that sold over the previous 30 days, you get an index of a sort, and it will basically tell you how long it will take before all the homes on the market should take to sell. Yes, and the higher the number, the more months it will take. The more of a buyer's market, the lower the number, the faster it will sell, right, and more of a seller's market, right.

Aman:

If you look at that information by city, el Cerrito has the lowest number. I think 0.6 right now. So El Cerrito and we're seeing this in other data points as well, and especially in terms of the sold data that El Cerrito is seeing the greatest level of competition and we think that this probably started maybe a year ago, particularly when a lot of people were not moved away from looking in Oakland. Yes, right, because there were some perceptions of crime that were pretty strong and you know, I'm scared, I think a lot of people away from pursuing that city. Yeah, you and I talked about that we did talk about that.

Declan:

Yeah, it was amazing. We talked about Tamaskal and just certain pockets and of course we couldn't conclude for sure, but there did seem to be some correlation between perception of crime.

Aman:

Yeah, and for a while there we were seeing Oakland declining in competition levels and price. Yes, but you might see Union City or Fremont do better, as Oakland dropped El Cerrito pot Right.

Declan:

It's a very competitive market, shout out to some of our extraordinary El Cerrito centric agents, who there's a high percentage of extremely qualified and adept agents working the El Cerrito market right now. Honestly, I think they've moved the needle with their social media.

Aman:

Absolutely. Yeah, some smart people out there for sure. So that's just kind of the big picture in terms of supply and demand. We would expect fully that the supply is going to spike the weekend after Labor Day. It's exactly what happens every year and I will do my spiel, which I do every year, and remind agents and clients that if they're looking to buy or sell in the fall market in September, there will be a flood of new listings, as I just said, that, if they're looking to buy or sell in the fall market in September, there will be a flood of new listings, as I just said. So it's doubling or tripling of inventory within a week's time after Labor Day. This means that sellers will have greater competition among other sellers.

Aman:

Right Buyers will have more to choose from and this basically means that days on market is going to get longer. Number of offers is going to drop on an average basis, yeah, and price over asking is usually gonna drop. And if you look at the and those key metrics across an entire year, they are generally the strongest in the first three months of the year and they fade off over the course of the year. So when you do all this activity in this last part of the year, in September, don't expect the same performance you would have gotten in spring. So that means that we're going to see maybe some of some, maybe some of the weaker offerings regarding you know the way it's presented the price point, whatever it might be yes, that they're going to more likely to take price reductions, sit on the market for a while and you're also probably going to see higher cancellation rates.

Declan:

Okay, you talked about El Cerrito being having the lowest or least amount of month supply right. And I've noticed. One of the big things that stuck out to me about our inner East Bay market the three biggest cities Oakland, berkeley and Richmond is that Richmond far and away stands out as the city that's had the highest amounts of inventory, but it's been performing pretty well. So of the three cities, oakland, berkeley and Richmond.

Aman:

Three cities Oakland, berkeley and Richmond. The cities that generally perform the best are, let me say, the ones that have the hardest time, and that is Oakland and Richmond. Okay, they have. Oakland is at 3.5 months and Richmond's at 3.8. Okay, okay, and then the rest of them tend to be quite a bit lower. So the highest one is Alameda at two, san Leandro at 1.7, berkeley at two and then El Cerrito at 0.8, actually is the number that it is now.

Aman:

So, although Richmond, you do have plenty of pockets that attract a lot of attention, you also have a it's a pretty big city, as is Oakland, which is even quite a bit larger, right, and you have large swaths of those cities that some buyers just would never go to, you know, because it's just not a fit for whoever they are, what they're looking to purchase. Right, and those markets move in very different ways, right, right, you know, you have Richmond Annex, or North and East, and or Point Richmond. You have Richmond Annex, or North and East, or Point Richmond, and you compare that to, say, the Iron Triangle, they're going to be pretty different in the way they perform.

Declan:

Yes, and if you have East insight, because formerly it was a fairly expensive place to live, exclusive kind of neighborhood but in recent years has fallen out of favor, most likely due to insurance, but it's Montclair.

Aman:

Montclair is really interesting. The data set that we have now we actually have Montclair separated by an area slightly to the east of it, which is a little bit more in the hills, and it's called Forestland. I never heard that term, but that's what our data set says. It's called Okay and it has one of the densest collection of cancellations.

Declan:

Really.

Aman:

Yeah, yes. So when you look at density of cancellations, you'll see them for the most part in East Oakland and in the very upper hills of Oakland.

Declan:

Okay, let's linger on cancellations for a second, because I think it's an overlooked part of the data set and I think it's very. I'd be curious to just get any insight you have on it, because, of course, oftentimes when we're doing CMAs and all that stuff, very often we're just looking at active, pending and sold and we're not including cancellations into the data. But I often try and take a minute to look at cancellations because there's there's, there's relevant, it's like you don't know what you don't know, yeah, kind of thing.

Aman:

So, if you have any, uh, cancellation info, you do, I do, I do, yeah, uh, it might be best to kind of talk about it, uh, in sort of broad terms, so we can kind of you know, talk about trends. Yes, um, so, just so you know that when we're talking about cancellations in this data set, if a property is canceled, comes back on the market and then closes, that's not counted as a cancellation in our data set, we count that as a sold. Okay, that's great. Actually I like that.

Declan:

Yeah, because this is why this data is difficult to track. Yes, exactly to your point. Yes, and so thank you for pointing that out. So you've removed those cancellations from the data, right where they take it off the market for 30 days.

Aman:

Let the days on market reset, Okay. Okay, so we're tracking there and it has to sell within a year. So that's kind of how we set the outline of it Perfect Across the board. Cancellation rates have increased pretty much by every property type and by every city.

Declan:

When do you say increase, increase since when?

Aman:

Year over year between 24 and 25 for the first half of the year. Sorry, I didn't clarify that so far this year, of all the homes that have come off the market through June, 14% have canceled, and a year ago that would have been 9%. Interesting, yeah, generally speaking, that's all single family homes. Cancellation rate for condos is higher, at 18%. We're seeing declines in value there. I think a decline is about 12% in medium price year over year for condos. Wow, yeah, pretty rough.

Declan:

But you know if you're selling lots and land, your cancellation rate's about 70%. Yeah, lots and lands have really just, I mean it's just plummeted. It's been absolutely awful. I'm surprised, frankly, that the condo cancellation rate only 4% higher than single family homes. That surprises me, but the decline in value doesn't at all, you know, doesn't at all surprise me. Okay, let's talk about the cancellation rate in, let's say, oakland, berkeley and Richmond.

Aman:

Those are our big cities. Sure, sure, sure, let me one second. So yeah. So cancellation rates by city I would say it appears that the highest cancellation rates this year so far these are properties that have come off the market and did not sell are Oakland at 17%, and again, a high density of that is in East Oakland.

Declan:

Right Single-family homes.

Aman:

Single-family homes is all we're talking about here. Okay, and then Richmond is also at 17% Interesting.

Declan:

Okay, and then Berkeley is at wherever it needs to be, berkeley's at 9%, alameda's at 7% and then Piedmont's a sliver almost nothing cancels.

Aman:

But when we start getting into that sort of conversation we can also start narrowing by price point and you'll find that there's a. And this is actually where I think some of the human behavior in response to the economy is really going to surface itself.

Declan:

What are the things you're?

Aman:

noticing that stand out. I think it's interesting to talk about price, and we talk about things in terms of median price and we primarily focus on single-family homes. We talk about things in terms of median price and we primarily focus on single-family homes. So, as I said at the beginning, that June was surprisingly strong in terms of sales. Usually you see a kind of a drop-off in the number of closings, primarily because people are, you know, they head out in June after the kids come out of school, they head out for Fourth of July, so there's just not a lot going on in terms of closings. So that actually stayed flat and actually went up a little bit in June. And I think part of that is because there was so much instability in the first, say, three months of the year with all the changes that Trump was enacting and the questions about tariffs and such, that I think it delayed a lot of people taking action on listings and I call that the boomerang effect, where you have that kind of drop at one point and then it pops up on the other end to kind of make up the difference.

Aman:

And I think that we saw that in June. Median price also popped interestingly. So in May the median price was one point. Well, I'll just say that the median price popped up quite a bit. It's now at 1.230. Let me back up for a second. Yes, when we talk about general trends and going back by year, it's really not fair for us to talk about 21 and 22,.

Declan:

Those years yeah, a lot of realtors use a baseline of like 2019. Yeah, yeah, because when you look at, they were such an anomaly, because they were really that. Yeah, a lot of realtors use a baseline of like 2019.

Aman:

Yeah, yeah, because when you look at they were such an anomaly because they were really that you know there was a real rush of real estate activity during that time period and many brokerages, many markets saw all-time highs across the board during that time period Right period and what we're seeing now now that we're kind of past that and into 24 and 25, is that the market is behaving much more closely to, as you said, 2019, 2018. And so, in a lot of ways, it's actually very close to the same. The big difference that I'm seeing is that, prior to the pandemic, activity in the inner East Bay was declining year over year. If you guys recall this, I do recall, yeah, at the beginning of 2020, prior to lockdown in march.

Declan:

Yeah, we knew that, we, that that golden, you know, eight year period, you know, from 2012 on, was we kept there was like this bet every time the data would come out to say are we going to look at negative?

Aman:

you know, we're going to look at depreciation of homes Because the appreciation was getting narrower and narrower and narrower and just look like we're looking at a place where it's going to change.

Aman:

And then the pandemic hit and then everything was off the table. But I will say that between 23 and 25, the market has picked up. Okay, okay, yeah, it is still relatively quiet. So the first half of this year, in terms of just pure sales, it's the fifth least active year since 1997. Really, but it's on the increase, okay, so, for whatever that's worth. So if you're a realtor and you're thinking, god, things are really tight still, it's like, yes, you're not wrong, because it's not like it used to be.

Aman:

Yes, yeah, yeah, okay, so anyway so kind of putting that in context. I am bouncing around a little bit. I apologize. I hope people can follow my thread here. So anyway, the median price in June of this year for the Inner East Bay was $1.23. And if you take $21 and $22 out of it, it was the highest median price ever recorded in the Inner East Bay.

Declan:

Really.

Aman:

Yeah, the highest median price ever recorded in the inner east bay, really. Yeah, yeah, so again we're kind of coming back to this contract now. Usually price tends to to peak around june yes, of course, so that's kind of why we saw that increase. But yes, you know we're seeing strength in that price, that's very robust.

Declan:

Yes, now again. Uh, you know me, I'm never satisfied with just saying the inner East Bay. Can we break that down Again? Let's do our three big cities Oakland, Berkeley and Richmond.

Aman:

Right.

Declan:

Yeah.

Aman:

So it's Albany, Berkeley, El Cerrito, Kensington, Oakland, Piedmont, Richmond.

Declan:

But is every city doing? You know is peaking, or is it a select number and then A way to kind of address that.

Aman:

I think it's going to be a long road to get to that answer, because I think the best way through is by price point. Yes, okay, right, because if you talk about Piedmont, we can talk about Piedmont, but it really has to be done in the context of price.

Declan:

Yeah.

Aman:

Because I don't think things sell below 1.5 in that city, right, and you have homes that sell for 10, $15 million.

Declan:

And your data set is often your data points. You don't have a huge volume of sales.

Aman:

In that city, correct? Or in Kensington you have these small cities, so it can be a little tricky to understand how each city is performing. But what I think is happening and I think this will inform the conversation about cities is that the lower end of the market is fairly weak. So if a home sells below a million dollars, the lower the price, the more likely it will sell Under asking. Take price reductions, sit longer on the market, take fewer offers all the metrics that show that there's weak demand and usually that's because those homes have some challenge that has to be overcome. It could be again, condition, location, how many people is it attracting, how many buyers is it attracting, and such. But what's interesting is that the middle of the market, which is the 1 to 1.9, that's about 44% of all the sales in the inner East Bay, is performing extremely well. So homes there are selling something like 22% over asking.

Declan:

Okay, yeah.

Aman:

And then, amazingly enough, as you get even higher in the 2 to 3 and the 3 plus, it gets even better in a lot of cases. Really, yeah, so that upper end of the market is performing extremely well, wow, and I think this actually kind of connects to what you were saying before, and that is that if smart money has cash, that they can move around and they can buy things as they wish. For the most part, yes, they see, many of them see real estate as a hedge against inflation.

Declan:

Yeah, right, that's the conversation I'm hearing, right.

Aman:

Right. So they may very well be making some moves to protect themselves over a longer period of time.

Declan:

Right, and so that benefits the higher end of the market. So the segment of the market that's doing least well in our inner East Bay, as far as days on market and price point is below a million, yeah, below a million.

Aman:

And when you go 500 and below, it's even worse Really. I'll give you an example so far this year, if a home sells 500,000 or below, it sells an average of 7% below asking Really. And if you sell a home between 2 and 2.9, it sales on average of 21% over asking.

Declan:

Really Mm-hmm. Of course I know that certain cities will have a higher list versus sales price than other cities.

Aman:

Yes, and so now we can talk about that in terms of different cities.

Aman:

Obviously, when you have a greater density of higher-priced homes, like, for example I don't remember off the top of my head, but I think the median price in Berkeley is like $1.7 million yes, right Now you're starting to fit into that range of that $1 million to $2 million, and that's where a lot of that competition is happening. Yeah, now, if you don't have that many homes or you have a higher density of higher end by neighborhood, by city, that's going to also inflect how things perform. Yes, in terms of city performance, certainly there's some that's somewhat dictated by the inventory and what the sale price is and such. Yeah, but I will say that if you look at just, say, price over asking for, say for Albany, homes are selling there at an average of 34% over list. Wow, now, that's always been the case with Albany. It's always been this kind of outlier and I used to have access to information that would say what's the highest price over asking by city for the entire Bay Area. Yes, and usually Albany was number one. Really.

Declan:

Yeah, I thought it was Berkeley. That was my recommendation.

Aman:

It's close, close to that and actually Berkeley has been doing very well. Yeah, I think a lot of people are still trying to get into Berkeley as best they can and if historically, when you look at long-term appreciation rates say like well over 20 years, usually the cities like Richmond, parts of Oakland tend to do the best right Because they started at such a low point and then they went up, the city that has generated the highest increase in value, currently over 20 year period, is Berkeley.

Declan:

Is it really yeah, because, yeah, we had talked about this on previous occasions, you and I and how, if you bought in West Oakland or bought in a lot of Richmond 15 years ago, that you were going to see greater appreciation than in Berkeley, that's the last time we chatted.

Aman:

Right, but I think that's because the market as a whole was so hot that people who couldn't buy in Berkeley were looking in these other areas. Yes, now it seems like a lot of people have been shaken out of that search, so possibly the people who might have been buying in East Oakland just because they need to get a place and get in the market now may not be buying. Maybe they're buying somewhere else.

Declan:

Yes.

Aman:

And people who do have the money, who do have a reliable income, are focusing on the most attractive areas and that's something like Berkeley. So that's pushing, you know demand up.

Declan:

I mean, that's definitely. It's nice to hear this because it confirms what I've been seeing in the data, which, if we don't talk about different neighborhoods and pockets in Berkeley, oakland or Richmond, we'll just talk about each city in general. It seems to me that you know without fail Berkeley is just reliable, consistent.

Aman:

Yeah, and you can actually go back and look at the spots where price dropped the most across the area, such as the financial crisis of 2007. Yes, right. And then the pandemic and such and all those kinds of variations. Berkeley just dropped during that time period, but it didn't drop very much, right?

Declan:

Yeah, yes.

Aman:

So you know people will fill in if there's an opportunity to grab a spot in Berkeley.

Declan:

Did you see? I think it's in the Chronicle. Not that we needed the Chronicle to confirm this for us or anything most realtors are aware of this but it was interesting to see that it was a news story in the Chronicle in the last I don't know 48 hours that Thousand Oaks neighborhood has. The eldest homeowners are older on average in Thousand Oaks than anywhere else in the Bay Area.

Aman:

Mmm.

Declan:

One of the things that used to fascinate me and it was kind of a magic trick that you could reach for it because I thought it was relevant. We used to talk about how you know, you know different, how an additional bedroom or bathroom like, for example, going from a two-bedroom one-bath house to a three-bedroom two-bath house, how that can change things like, for example, price per square foot, yeah yeah.

Aman:

So I have a chart I'm looking at right now that essentially explains how much a two-bedroom, three-bedroom, four-bedroom and five-bedroom would cost in each city. And by seeing that all in one place you can say, all right, I have this much to spend, how much can I get here versus there? So I mean, I don't know how far you want to dig into that. I mean, as an example, if you have a budget of $1.6, you can get a three-bedroom in Berkeley or a four-bedroom in Alameda or a two-bedroom in Piedmont. You know it. Just, it really depends on you know you can use this as a chart and say you know, what am I trying to target, what am I trying to zero in on? And this is why, you know, we have this data set available to us at the Grub Company, because agents will come and say I have this question.

Aman:

Yes, I'm trying to show how this has changed or what a duplex versus a fourplex is doing. Okay, and that helps sellers, it helps buyers and such. Yes, but so much of the answers. Someone said the other day I said I'm going to be giving a presentation with 40 charts and they said can you just present it in a one? And I'm like I really would love to do that. I would love to do that, but the story must be told from different points of view to have a really clear understanding of what's going on. Right, you know, right, right, so, yes, I can show price and how it's changed over time and how it compares to cities and bedrooms and such. But to really understand how a buyer or seller should move forward in this market, they have to understand all the metrics that are affecting it. Right, so you know.

Declan:

Just having a general understanding of what the bedroom count will give you in different cities, I think could save people a lot of time. Yeah, will give you in different cities. I think could save people a lot of time if they can accept that kind of information, because it seems, on the other hand, to also be that property values are not going down.

Aman:

No, they're not, they're definitely going up.

Declan:

So the longer you wait as we know in this game, you know the more you hold off, the more likely that you know you run the risk of things just getting a little bit out of reach.

Aman:

Yeah, and I have a chart that I really love here and what it shows is the median price of a single family home in the inner east bay since 1997. Oh, wow, okay, and it shows it by year. You can see a little up and down and all that stuff, yes, but what you also see is the change since 1997. Yes, and home value is appreciated. Now, this doesn't account for inflation, okay, but the home values have appreciated 500% since then, since 97. Yeah, and what I like about that line is that it's essentially a straight line up. Yeah, now you do have, obviously, a dip during the financial crisis. You have that shift in 21, 22 where things popped up and they came back down. But if you extract those portions and you just overlay the line across that appreciation, it's essentially unchanged. It just keeps going up at this certain rate Right.

Declan:

So there are these moments in the market where there's a dip, but over time it's really just an up and to the right and so it's always that thing, isn't it? It's like timing that dip. Well, you know, and oftentimes when there is a dip, as much as people think that's when they're waiting around to make their move, then it actually takes a lot of courage to make a move in real estate. When everybody else is freezing, you know, I think by and large people just freeze.

Aman:

When the crowd freezes, very few people will run ahead and do their own thing, so the lowest price ever recorded in the first half of a year, going back to 1998 in this case, prices in 2009 had a median of $155,000. Wow. So if you said, all right, I know that I have enough money to purchase a property, despite all the insanity of this market right now, if you had bought then and paid $155,000 for it, price properties currently have a median of 1.15. It's amazing isn't it yeah?

Declan:

I remember when I would deal with younger people in their 20s who just happened to be 23, 4, whatever they could afford a first home back in 2009, 10, 11, and I would say, with all respect, not in any kind of pedantic way, but I would say you know, you're lucky, your age and ability to buy your first home happens to coincide with this moment in the market, and so good for you. Try not to in five or ten years, try not to claim that you were a genius, that you had orchestrated this. It's just life and it's just lucky that your moment to buy coincided with this moment in the market.

Aman:

It's very, very hard to time the market.

Declan:

You can't time the market.

Declan:

But what you're describing? No, clearly there is a trend over time, and so property this year over last year, despite there being endless things for us to worry about nationally and globally you know, endless things for us to worry about nationally and globally In the inner East Bay, here and I think it's important to point that out because we're not Florida and we're not going to look to some other state or other markets where we, you know, there's a different cause and effect but here in the inner East Bay, despite the chaos and there's a lot of chaos the median price point has increased.

Aman:

Yes, the Interest Bay is a complete anomaly when compared to the rest of the country. Right, just as you say. Right, when you think that the median price in the country is $400,000. Yeah, and the median price here is over a million dollars. Yes, right, I heard someone mention the other day that in some parts of Florida the average days on market is over 500 days.

Declan:

I mean, can you even write a listing agreement for that? I'm not sure. I don't know how long.

Aman:

Yeah, how long can you keep it going that way? But you know, currently in last month in the Inner East Bay it was 26 days and that was relatively high.

Declan:

Yeah, so it's very strong. And you know, I know that even just over the Carcina Straits into Solano County, it's a very different situation there, and I mean, they're our neighbors. Yeah, that's where you go when you're headed out of town.

Aman:

Yeah.

Declan:

So it's pretty amazing. So we have a very healthy. Well, it depends on which side of the table you're on buying or selling. But for people who are selling property and here's the hard part right, property values have declined since 2021, let's say, but they've increased since 2023, right? Yes, and so are you looking where are you looking to feel satisfied that you're getting? You know these are the conversations right that we see all the time we we talked about at the top of the podcast. We talked about seasonality a little.

Declan:

And yes, there's a primary selling window, but you pointed out february through, uh, things closing into june maybe, and then there's a. There's a kind of a secondary window, a short selling, but it's. It's short, you pointed that out to short selling window, where the listing account will start to increase fairly substantially right after Labor Day and maybe even, in recent years, a little ahead of Labor Day because the school year has changed a little. Yeah, yeah, yeah.

Aman:

So, yeah, this is an interesting conversation because we certainly have many, many years of data that says, you know, as we talked about, that post-Labor Day spike and certain behaviors and back and forth and some frustrated sellers and agents as a result of those changing dynamics. Yes, so then the question is well, if you're a seller, how do you stay ahead of that trend, right? So there's generally been a conversation around two ways to do that. One is that you potentially list the home in the second half of August. Yeah, and to your point, that's because the school year start of the school year has moved up and up and up.

Aman:

Now some schools start as early as August 6th, many August 13th, I think that's the Monday or Tuesday, okay, so you know that means a lot of people are back in the city, right, and they are potentially looking to buy, potentially. Again, I don't necessarily have a ton of data to support that, but it makes a lot of sense. You know, the way I talk about it is, if you're driving around the inner East Bay and there's no traffic, that means your buyers and sellers are the ones who are out of town, right? So it gets very difficult to sell a home when you've got no one around. So, anyway, people are back for the most part at that time frame. That's when Cal comes back. It's also when traffic starts coming back as well.

Declan:

Right, right so whatever that's worth.

Aman:

But the other time to focus on this is possibly after that initial spike of new listings that come on the weekend after Labor Day. You give it those two, three, so weeks of time for that inventory to get absorbed and then you come on, say, the first weekend of October and then you become the new guy in town. You might be able to steal thunder from these kind of maybe weaker lingering properties that come on after Labor Day and you kind of beat that level of supply and demand that gets in your way. But you're trying to do it in a way so you don't have to hit your head against Thanksgiving.

Declan:

Yes. That's the tricky part, would you say it's reasonable to anticipate that it'll continue to be healthy in September, and maybe just a little bit better than last year.

Aman:

I would imagine that the trends would hold, yeah. That what we see in the first half of the year will continue through the second half of the year. So, yes, I totally agree with you.

Declan:

Yeah, if you were buying real estate yourself, what time of the year would you get out there and shop?

Aman:

Good question. Well, so much is dictated by having the right home for me, yeah, and so, yeah, you can sit around and say, okay, I think this is the best time because I can get the best price over asking, which I'll share with you in a minute but I may not want those homes that are available for sale, I want the home that I want to raise my kids in, or whatever I want to do. That's how I should dictate. Now, if you could control and you could say the quality of inventory or the matching of inventories is consistent across all those time periods.

Declan:

Yeah.

Aman:

The lowest price over asking, I think, is January for closings, okay, okay. So don't forget that these are closings, right? So if it closes in January, it means it ratified in December, which means it probably came on the market in November.

Declan:

Yeah, something like that, and it could have been sitting for a while, exactly All that kind of thing.

Aman:

So days on market might have been longer and sometimes you might have people who are sitting on that property and they're just like I just want it sold, I just don't want to deal with this anymore. And so you usually see actually a spike in cancellation rates at the very end of the year. Yeah, but then to your point though you're absolutely right.

Declan:

So, waiting around just for this period of time when you might get a better deal, you run the risk of the home that suits you not being available because a lot of realtors who are more seasoned they will hope that their sellers can hold that property for a better time of year, Right? So that's the challenge, isn't it?

Aman:

So challenging. Yeah, again, that's why it's so hard to time this and try to control the metrics in your own way, because ultimately, you don't really have control over the metrics. Right, you have that specific home and that specific dynamic of how many people are putting in an offer, how is it listed, how is it prepped, and you've got to make a decision given those variables. Yes, you know, and once you get into that specific property and they're thinking about that kind of the broader averages are just pieces of information that you use to kind of inform your decision, but they shouldn't dictate them necessarily.

Declan:

Nicely said, and so a question we get asked a lot or, you know, maybe not, we don't explicitly get asked, although sometimes I do, but people have concerns. You know, is the market going to crash? And I feel fairly comfortable at this point, several years out from the pandemic, saying that's just a very poor line of reasoning and needs to be just. It needs to be argued that no, and there's a few reasons for that. It goes to the equity people have in their homes. It's tremendous, it's actually historically high. We've never seen this kind of share in equity that people have in property ever. I mean, it's just without precedent. That's all you need to really, once the light bulb goes on there for you, there's no crash coming. What do you think?

Aman:

Well, we don't have enough inventory. I mean, we just don't. And if you absolutely, people are holding on to their homes for longer, it's their retirement nest egg in a lot of ways, right, and they enjoy living in these places, right. But this is also why Berkeley has kind of been on the forefront of making some pretty significant changes, right, and the state as a whole have made some pretty big moves in terms of really easing development. You know, berkeley has repealed the zoning component of that. So now there's going to be more multi-unit buildings on existing lots yeah, much easier to build across the state. Yeah, on existing lots, much easier to build across the state.

Aman:

And there's a lot of Yimbies out there, especially in Thousand Oaks actually, who are. They want to see this city continue to thrive, and that means building more. And so I've seen plenty of people I live in Elmwood. I see plenty of people who are probably in their 70s or 80s and have 3,000, 4,000 square foot homes. Do they need all that space? No, but it's a beautiful place to live. They have a beautiful backyard, right, oh, yeah.

Declan:

Yeah.

Aman:

There's lots of companies that are out there trying to solve for this, and it's nice to see some big changes being made in the laws to allow for this. I've heard I don't know if this has gone to effect but the ability to sell ADEs as condos is also something coming up.

Declan:

Yes, it is.

Aman:

Yeah, yeah, so there's some good changes there, but no, I don't think that the Bay Area, specifically, outside of some seismic no pun intended event that could happen here when you look at the fact that Cal is here, when you look at Stanford isn't that far away. When you look at how many people are coming to San Francisco to work in AI and how Berkeley itself has become a hotbed of new ideas and new startups around that space and, of course, OpenAI is based in the Bay Area as well. Like all these, Google continues to be strong, Facebook continues to invest. Like these are. It's churning out GDP. It's churning out One of the strongest economies in California, if not the entire country, if not maybe the world I don't really know.

Aman:

You know, and then you also overlay that with biotech and all these other elements, and I see San Francisco coming back in a big way. I see Oakland has improved quite a bit, from my experience and the numbers that I've seen, so I don't see anyone walking off a cliff in terms of value. Now, could there be a cap on how much people can spend? That's a possibility, and I will throw this into the mix that I do have many friends who work in very senior levels in technology and can't find jobs, and I do think that that. I don't know if it's specifically about AI, but I do think it's a contraction in the technology space, much of that driven by VC investments and return on investment with the money that's being spat.

Aman:

So, it's just not as robust. I don't think of like an A-series or seed series worth of startups. Maybe that'll change as AI continues to evolve, but I think there's probably more people with a tech focus than there are jobs right now and that may just get worse.

Declan:

So typically when you and I, eamon, when we have our conversations, you know we're just, by and large, talking about single family homes and that's been just fine. But because the condo market has really been performing so differently, I think, since I have you here and I don't want to end on a sour note because single-family homes are doing so great but condos not so much. And I think it's worth talking about because a lot of agents out there and I'm hearing from people they just don't want to take condo listings and so I mean even the number of agents willing to handle condos, it seems to be a smaller number than those that are willing to handle single-family homes.

Aman:

Yeah, no, it operates very differently that sub-market and it's funny when I do relate these numbers to agents they usually say I'm surprised they're doing as well as that's being reported. They have a feeling that it's much worse.

Declan:

Well sour, just got a little sweeter.

Aman:

It's all relative so I'll give you a few data points so you can chew on, regarding condos in the Inner East Bay. So the median price so far this year, the first half of the year, is $535,000. That's down 12% compared to where it was a year ago, which was $608,000. That's down 12% compared to where it was a year ago, which was 608. 18% of condo listings cancel and that's up from 10 the year prior. So that's a pretty significant increase in cancellation rates.

Aman:

Properties do tend to sell under asking just about 1% below asking and these are all signs that, yes, the condo market is weak, generating an average of 1.4 offers. So that's the lowest across all the property types that we track, and that's down from a 1.6. And days on market is at 46 days on market, so that's pretty high. So there's a lot of weakness and I think part of the reason agents are shy about condos is because their frame of reference is typically single-family homes. Yeah, right. So you know, year-to-date days on market for single-family homes is 26. It's 46 for condos, right, right. So it just feels weaker. It is weaker, you know, I don't know. I guess from from a, from an outsider point of view, in some ways I feel like an outsider because I'm not actually buying a home. But if I were to buy a home, I personally wouldn't mind having a condo. So I don't exactly know why the it's such weakness. I mean, maybe it's the property types, maybe how old they are, how well they're kept up. There could be a lot of factors.

Declan:

there's a lot of and and and I and I did a podcast with Carrie Naslam on Monday just I don't know, maybe a month ago where we kind of we went into this and she pointed out four specific reasons why you know why the condo market hasn't done well in her opinion, and I think she was on the money with it, so anyone can look for that. It's just a few episodes back. The thing that's never changed really in real estate is that real estate, you know, correctly purchased, should be fitting the needs you have at that moment in your life and how your life might be over the next 10 years, as best as you can tell, and that you know all of this is really just a distraction from that essential truth, right? So I mean, you and I were talking a little bit off mic about just this big battle that's going on currently mostly between Zillow and Compass and these private listings, so in other words, listings that aren't making it onto the multiple listing service listings. So in other words, listings that aren't making it onto the multiple listing service. And so there's a lot of angst and politics and there's a lot going on there, but there is some legitimate concern as well that a lot of boots on the ground realtors have, and so I don't know if you can extrapolate from the data anything that might be helpful here.

Declan:

But I think generally the concern is that well, conventional wisdom holds locally that the greater the exposure for a property, that the greater likelihood you'll have multiple offers and more people interested in the home and that can really be a benefit to the seller.

Declan:

So, in other words, just that common sense idea of greater exposure is a benefit to the seller and fair enough, Absolutely.

Declan:

And so I think a lot of the conversation, particularly around this private listing thing, is that sellers should have the right to privacy. And and then anecdotally and so I want to see if you have any data for this, but anecdotally, that privacy that I, that need for privacy, a conversation seems to be at a higher end. You know higher end of the market, more more you know in the luxury, or definitely you know the higher end Right. And so what would be the data that you can find in the MLS that would sort of confirm that you know that, let's say, exposure is a benefit to sellers? Like I'm thinking you know multiple offers, for example, anything at all, but if you're willing to go there and talk about this aspect of things that are going on right now, Sure yeah, I'm not interested in, as we discussed, throwing my hat in the ring in terms of what's right or wrong, or politically what should be done, or any of that stuff.

Aman:

I'll let the smarter people figure that stuff out. But all I'm looking at is the chart here and I'll just explain it to you and maybe it will be helpful to you. But essentially what it is is a scatterplot, and what that basically means is there's a little dot representing every transaction in the inner East Bay single family home since the beginning of the year, okay, and the x-axis along the bottom says the number of offers that were written on those transactions, and then on the y-axis, on the way up, it compares how far over or under it's sold. Okay, okay. So what essentially you're seeing is that there is a trend that says the more offers that are written, the further over list the property tends to sell. Okay.

Aman:

Now I want to be clear that that's. I'm not saying that there's causation there, okay, there's just a relationship there, okay, okay, and you could therefore say the higher the price, the more offers. But basically what you're saying, what it shows here, is kind of what you're talking about, and that is, the more buyers who can see the home, the more likely you're going to get competitive offers and, conceptually, what we think is that you're going to get a higher price or at least match or exceed the expected value of that property. That's the unknown, because we don't know what the value of that property should be. Right, right, that's just outside of the don't know what the value of that property should be. Right, right, that's just outside of the data's purview.

Declan:

Right.

Aman:

But what's interesting about this is that the higher the sale price, the more these factors come into effect.

Declan:

Okay.

Aman:

So the higher, the more buyers you can get on a $3 million plus sale, the more likely you're going to get more offers that are further over asking, and so what I've heard is that a lot of those higher end homes are the ones that might be most likely affected by those not being shared to the market because of privacy or whatever purpose that might be, and those sellers obviously have the right to think what they want to think, and you guys work that out yourselves.

Aman:

Yeah, but there is clearly an impact from what I can see and from every study that I've read from Bright MLS and several others that have all said that Right, and if you guys know about this Bright MLS study, they just were updated at the beginning of this year. No, but essentially it compared homes that sold this and Bright is one of the largest MLSs in the Pacific, on the Atlantic seaboard, in the Northeast Right Massive yeah.

Aman:

Yeah, yeah. What Bright MLS has found is that homes that sell off-market have a 17% lower median price than homes that sell on-market. Okay yeah, market, okay, yeah. So this all kind of supports the same suggestion that the more buyers you get, the more offers you get. The further asking you get, the higher price you get. It's a pretty common sense kind of approach. It kind of is, yeah, I think so.

Declan:

I mean really. What it boils down to then is the information being given to the homeowner, and that's what we just don't know. But if you sat down with me and I'm selling a property in the $2 to $3 million range and you present me with this data transparently, but yet I decide that I don't want to be publicly on the MLS, I'm taking a risk. That's what this data, this, what do you call it? Scatter?

Aman:

It's a scatter plot yeah, that's what this scatter plot.

Declan:

That's the conclusion I'm going to draw from this scatter plot. But that's okay, because you've been transparent, you're showing me, yeah, so because you're trying to protect yourself against a lawsuit, that's sure.

Aman:

Right, that's part of it, I guess.

Declan:

So you're giving me that information but you're also giving me the choice, right, that I can say you know what I prefer to just keep this, because your brokerage has a huge number of agents locally, and I think that's enough exposure for me, right? Well, eamon, I am just excited. When am I going to see you again? I don't know. That's your call Happy to meet Toward the end of the year, maybe we'll do this again.

Declan:

Yeah, it's always a pleasure, so let's go over the contact info. If anybody wanted to reach out to you and talk about all this, where can they find you? I'll put it in the show notes, of course, but just.

Aman:

Sure, If you have any questions and want to chat with me about any of this, disagree, agree. Whatever you feel, probably the best thing to do is you can just look me up on Google or you can email me at adarrow at grubcocom.

Declan:

Hey, darrow, can't wait to see you next time. Alien, I really mean it, you bet. Thank you, eamon Darrow. And next week I've got Ellie Ridge on the podcast. That should be fun. Okay, credits this episode was edited by me, with original music by Chuck Lindo and graphics by Lisa Mazur. The podcast is brought to you by the Home Factor Realtors thehomefactorcom. Catch up on the latest news from the East Bay Market in their weekly sub stack, published every Saturday. Go to thehomefactorcom to subscribe and if you'd like to reach out to me with suggestions for the show, that kind of thing, please text me at 415-446-8591. Catch you on the next podcast, everybody.

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