Boom, Bust, Bargain
As foreclosures eat into our wealthiest neighborhoods, turmoil hits the high-end market. But the deals are unreal.
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Trend Watch: Downsizing to Downtown
In a landscape dotted with sprawling homes, it’s something of a surprise to hear real estate agents utter the words “less is more.” But, according to many, there are an increasing number of buyers looking for smaller homes on smaller lots.
“I think the recession taught people a lesson on avoiding excess,” says Rothenberg. “The day of 5,000-plus-square-foot homes is tailing off, and more buyers are going to be looking for areas where homes are more moderately sized.”
Empire Realty agent Holly Kersis agrees. “A huge market is to move down market,” she says. “There are a lot of baby boomers wanting to downsize and go single story. They are out there in droves.”
What’s more, many of these downsizers are moving downtown. “Within Lafayette, for example, I have observed strong buyer preferences for living within walking distance of the shops, restaurants, and new library,” says Rothenberg. “As baby boomers seek to downsize, I think this trend will accelerate.”
The city of Lafayette approved plans for one downtown condominium development in 2007 and another in 2008. They have yet to be built (at least one was shelved due to lack of financing). But in downtown Walnut Creek, condos are booming.
“We’ve seen the downtown change a lot in the last 10 years. But it’s going to change that much again, if not more, in the next 10 years,” says Sposito. “The stuff that’s going on there is incredible.”
Fifteen condos are set for the corner of Bonanza Street and Sharpe Avenue, 11 for Ygnacio Valley Road (across from Walnut Creek BART), and 49 for Newell Avenue. The city’s planning department is also processing applications for three other developments: the 596-unit BART Transit Village, a 126-unit project across from Target, and a 300-unit plan for the former Longs headquarters on North Civic Drive. “Right now, the strongest new trend we are seeing in Walnut Creek seems to be proposals for construction of new [for rent] apartment buildings,” says Victoria Walker, planning manager for Walnut Creek.
The swish, San Francisco–like units of 555YVR have set the bar high for Walnut Creek condos. Interest might have been sluggish at first, but this superluxury development is now more than half full, with 35 percent of buyers between the ages of 40 and 60.
The baby boomer interest in these types of condos doesn’t surprise Sposito. “It makes perfect sense,” he says. “Your kids have gone. You’re sitting there in a 4,000-square-foot home. You don’t want to worry about a big home or a yard. You want to stay here because your family’s here, your grandchildren are here, but you don’t want to be tied to a big property.”
Some agents scoff at the luxury price tag that accompanies these units. After all, you can buy a condo in downtown Walnut Creek for a mere $140,000. A two-bedroom condo at 555YVR (or in the similarly high-end Mercer building on North California Boulevard) could cost north of $500,000. But you get what you pay for; these units are plush. Complete with a fitness center and rooftop deck with an open fire, barbecue grills, and views of Mount Diablo, 555YVR oozes sophistication for the high-end crowd.
The Flip Side: What If I Want to Sell?
With interest rates still low and housing prices bouncing along the bottom of the market, now is a good time to buy a home. But it’s not easy getting a loan. The guidelines are very stringent, calling for full documentation of all income and assets, multiple credit checks, and multiple verifications of employment throughout the process.
“It’s challenging,” says San Ramon mortgage broker Faramarz Moeen-Ziai. “But for good borrowers with good to above-average credit, there are many loan options available.”
If you do want to buy, chances are that you’ll be selling. And the biggest key to selling is a realistic price tag.
“The encouraging thing about Contra Costa is there are a lot of units trading. The same is true for the Piedmont area in Oakland,” says Mark McLaughlin of Pacific Union International & Christie’s Great Estates. “If you want to sell, you have the ability to sell as long as you’re willing to price it right.”
With some home values still falling and a market unlikely to boom anytime soon, many buyers and sellers are plagued by hesitation. But there are others who are beginning to look at the purchase of a new house a little differently. “There’s a shift in mind-set,” says Hank Perry of Empire Realty. “The house is becoming a home again and not a primary investment vehicle. Those are the people that are taking advantage of this market.” ■
The upside of down prices is spectacular deals to be snapped up all over our East Bay. Diablo tracked down some of the best neighborhoods yielding the biggest bargains.
“The consensus on Alamo is that there’s so much inventory in the upper end that nothing’s moving,” says Empire agent Holly Kersis. “So there are some really good-value homes to be had there.”
→ For sale: 4 bedroom, 4 bathroom, 3,011–square-foot home for $1.1 million. Past sale: $1.3 million in 2005.
→ For sale: 4 bedroom, 2.5 bathroom, 2,060–square-foot home foreclosure for $619,900. Past sale: $1 million in 2006.
A newer development in the foothills of Mount Diablo on Ygnacio Valley Road in Concord has some of the best deals around.
→ For sale: Most quality homes are in the realm of 3,500 square feet, and boast three-car garages, and many have views. Today, they are selling from the high $500,000s to the $700,000s. Past sale: Six years ago, they were going for as much as $1.1 million.
Prices are dipping deeply in this Livermore neighborhood.
→ For sale: 5 bedroom, 4 bathroom, 3,878–square-foot home for $899,000. Past sale: $1.4 million new in 2005.
→ For sale: 4 bedroom, 3 bathroom, 3,423–square-foot home pending short sale for $710,000. Past sale: $1.3 million new in 2006.
THE CORNERS / LOS OLIVOS
These higher-end Livermore neighborhoods offer some real gems.
→ For sale: 4 bedroom, 3.5 bathroom, 3,681–square-foot home sold last summer for $965,000. Past sale: $1.3 million in 2005.
→ For sale: 5 bedroom, 4.5 bathroom, 3,776–square-foot home pending sale for $925,000. Past sale: $1.5 million new in 2005.
Prices have plummeted in this affluent Pleasanton neighborhood in recent years, making for some great deals.
→ For sale: 4 bedroom, 3.5 bathroom, 4,656–square-foot home on a half-acre lot for $1.4 million. Past sale: $1.7 million in 2004.
→ For sale: 5 bedroom, 3.5 bathroom, 4,500–square-foot home on a half-acre lot for $1.7 million. Past sale: $2 million in 2005.
For more deals, look in Norris Canyon Estates, Windemere, and Dublin Ranch.