Realtors Navigate “Volcanic” Orinda Real Estate Market
The past 12 months saw office closures, work-from-anywhere-forever announcements, and rumblings of state income and wealth tax hikes. All of these factors brought increasing angst around the future of Orinda home prices.
But those factors didn’t spell doom for local home prices.
“We have not seen a mass exodus from California,” said local agent Ann Sharf of Village Associates Real Estate. “There’s a realization the suburbs are where it’s at, partially from the pandemic and partially from people being able to work from where they want to work. And, borrowing costs are so attractive.”
In many ways Orinda’s gain has been the San Francisco condo market’s pain, as the changes in daily living have had opposite effects on the market. New Orinda homeowners, however, are coming from a wider funnel.
“We have buyers coming from Marin; they’re coming from San Francisco; they’re coming from the Peninsula. Our prices are attractive to them. It’s a very strong seller’s market and it’s frustrating buyers,” said Laura Abrams of Coldwell Banker.
Sharf and Abrams, who both work with sellers and buyers, described the market as hotter than the 2004-2007 market. “It’s volcanic,” described Abrams.
Blockbuster IPOs and smaller SPAC stock listings (discussed in our February column) have increased the cash buying power of founders and early employees at those companies, particularly over the past two years.
“There is a lot of cash and the loan underwriting standards are still high. In 2006, it was based on shoddy lending. Not this time.” Sharf noted.
The influx of cash comes while interest rates remain near record lows. Cheaper borrowing costs mean that the same monthly payment can fund a larger price tag.
Borrowers who plan on living in a home for 30 years with a comfortable monthly payment don’t need to be as worried about a short-term pullback or stagnation in home prices. They plan to live in the same house, no matter what someone from across the Bay is willing to pay.
On the other hand, some Orindans may move to take advantage of current prices and the new Proposition 19 rules that allow for more flexibility in transferring the current property’s tax basis. Yet, while there may be some local sellers because of Proposition 19, the tax change will also make moving more attractive to more buyers looking at Orinda.
“If you are planning on leaving the area, there has never been a better time to sell your home,” advised Abrams.
“It used to be hard to sell a $3 million house. Not now,” said Sharf. “But with current protocols, it’s even more important to stage, present and photograph effectively because there are no open houses.”