Friends,

Happy New Year! I hope this finds you and your families well and dry after all of this much-needed rain.

Recently I received a letter of recommendation from clients that I helped purchase a home 15 years ago. My heart filled with gratitude knowing what a difference I made in Michelle and Ryan's lives. I'm grateful that they took the time to reach out and share their story; it reaffirms why I love what I do so much.

"It's hard to find the right words to describe just how incredible Grace is. Even harder now that we take a moment to reflect on just how big of an impact she has had on our lives. As we sit in our forever home, marveling at the life we've built here and the memories we've shared raising our children, we can't help but look back in awe and gratitude for the woman who made it all possible 15 years ago. It may sound like an exaggeration, but we are fairly certain that without her, we would not have gotten this house. 

With the Internet it's easy to find a house you like, but it certainly isn't easy to get it. There is so much strategy and nuance to the real estate game that we as buyers and sellers don't see. It's easy to get lost in the shuffle unless, of course, you're lucky enough to find an agent like Grace who not only knows the game but who cares enough to go after your dream home as if it were her own. We had no business getting this house. Suffice it to say the property was unique, interest was massive and competition was fierce. BUT...Grace was determined, tenacious, relentless, and would not stop until the home was ours. She worked her own special brand of magic on a near impossible situation and our lives have been so much richer for it. 

We often smile a giddy little smile and toast Grace even though she can't hear us. We marvel at how she pulled it off and how she has continued to be a positive presence in our lives-- always checking in, offering market perspectives and advice, sharing new restaurants, connecting us with her network of home improvement professionals and much more. She has been going above and beyond since the day we met her. So if you are looking for an agent who is brilliant, fierce, compassionate, knowledgeable, trustworthy, kind, calm under pressure and the loveliest of people. . .

Grace is for you."

Thank you Michelle and Ryan for the incredible accolades, I am humbled by your graciousness!

If I can be a resource for any of you, especially in this shifting market, please reach out. 

The 2022 real estate market could be neatly divided into halves: The first half was a continuation of the hot pandemic market, with the median price for single-family homes in the Inner East Bay reaching an all-time high ($1.2M in June). But then the Fed put the brakes on this exuberance, leading to a quick and sharp decline in the second half of the year. This leads us to the current state of the market, which we summarize with these 6 top takeaways:

• In 2022, the number of transactions fell precipitously. The number of transactions in December fell 43% compared to the previous year and Q4 transactions were at their lowest point since 2007. Full-year 2022 transaction count was flat from 2019 and up slightly from 2020, but down 22% from 2021, which was an unusually active year.
• Median price also fell, down 7% in Q4 compared to the previous year. This was the largest year-over-year quarterly decrease since 2011. However, when looking at the full year, the median price was $1,059,000, a 5% increase over 2021, and the highest ever recorded. There are some interesting stories in this data, though. For example, in Q4, compared to the previous year, condos depreciated 14% while 5-bedroom single-family homes appreciated 7%. Compared to 2020 or before, prices are still up significantly in almost every Inner East Bay city.
• Price reductions mainly affected lower-priced listings. In Q4 2022, 33% of homes that sold below $1M required a list price reduction, but among homes in the $1M-$2M range, only 14% took a reduction. Sales in San Leandro and West Contra Costa County were most affected by this trend with 37% and 31% of transactions reduced in price, respectively. 
• One of the biggest changes was the percent difference between original list price and sale price. In April, homes sold at an all-time high of 26% over list, but by the end of the year that number fell sharply to 2%, where more than half of closings sold at or below asking. This was driven by two, intertwined forces: sellers were more likely to price closer to expected value, and there were fewer buyers competing for listings (which is often the case in December). But there were exceptions: In Q4 2022, 74% of homes that sold between $1M and $2M closed over asking, selling an average of 13% over list. Furthermore, Albany sales averaged 23% over list.
• The number of canceled listings increased significantly, up 55% in Q4 compared to the previous year. This was the highest percentage of cancellations since 2013. What's more, over a quarter of listings that came off the market in the second half of 2022 were canceled and did not sell, the highest since 2011. This metric was particularly high in Oakland (40%), Piedmont (39%) and Richmond (37%).
• The higher the price of the property, the faster it sold but the more likely the listing would be canceled. The upper end of the market reacted to the slowdown in different ways: Homes that sold $2M or higher in Q4 2022 had an average of 19 days on market, the lowest among all price ranges. However, 49% of properties listed $2M or higher did not sell and were canceled instead. This may be because the owners of those properties had a specific price in mind and preferred to wait for a better market in which to sell.

While year-end metrics were not strong, we expect to see some bright spots in the first quarter of 2023. This is typically a time of low supply and high buyer demand, helping to deliver strong metrics to the few properties on the market. And if the rest of 2023 is similar to 2022, expect select properties to see strong competition, particularly those that are in high-demand areas, are move-in ready and are priced to attract buyers. For properties that don't fall into this category, buyers may find unique opportunities to purchase. View a complete report of 2022 data here and reach out if you'd like to discuss your plans.
 

December sales mark a significant slowdown: Compared to the previous year, the number of transactions fell by 40%, median price fell by 11%, homes sold only 1% over list and spent an average of 36 days on market. (Some of these values may differ from those referenced above because this table includes cities not typically considered part of the Inner East Bay, including Lamorinda.) But there are two important notes about this shift: First, the data is compared to December 2021, which was an unusually active market; and second, the quality and quantity of inventory may have been lower than usual as many owners are waiting for a better market to sell their home. Over the next few months, we will see if this theory pans out. Reach out if you'd like stats that are related to your real estate needs.
 

Inflation, inflation, inflation That has been a big topic in the mortgage world for the past year and we continued to get good news on the inflation front with the release of December inflation numbers. The Consumer Price Index (CPI) figures released on 1/12/23 were in line with expectations and markets generally reacted favorably to the news. Month-over-month inflation hit the forecast number of 0.3% and year-over-year core inflation continued heading in the right direction as it also came in at the forecasted 5.7%. After some initial volatility, mortgage bonds held the gains that they had made in the first two weeks of 2023 and continued to trend downward. Overall, what this means is that we are seeing the FED rate hikes working against inflation and while inflation is still higher than the FED target of 2.5%, it is significantly lower than the 9% number that we saw in Summer of 2022. Rates are down about 1.5% from their October highs with conforming rates hovering around 6% now and some jumbo rates available lower than that, depending on the specific scenario. Looking ahead, we do expect the FED to continue to increase rates by a total of about 0.5% in their upcoming meetings this year, but as long as inflation continues to trend downward, mortgage rates should continue to decline despite the FED rate hikes. If you have any questions about this, please contact Faramarz Moeen-Ziai of CrossCountry Mortgage, LLC at fmz@myccmortgage.com or 510.254.4697.

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Have you seen Red Oak's 2023 desk calendar, Artists & Artisans of the East Bay? It's filled with East Bay creatives from several different trades using a variety of different mediums. January features Lynne Meade Ceramics - she blends Asian, Art Deco and Art Nouveau influences with straight lines and undulating curves to create organic, geometric forms. Each piece speaks for itself with its intricate designs and simple color palette (avoiding many clay colorants that contain toxic metals). With an emphasis on mastering craftsmanship and sculptural quality, everything is done by eye without molds or templates. To see more of her beautiful creations, follow @lynne_meade on Instagram.

If you'd like a free copy of the 2023 desk calendar Artists & Artisans of the East Bay, just reply to this email with your mailing address.
 

In 2022, Red Oak experienced a variety of changes - from our newly remodeled office at 1575 Hopkins Street in Berkeley (across from Monterey Market) to simply needing less office space due to technology advances, resulting in the closure of the Red Oak office at 1891 Solano, to our El Cerrito office on Fairmount (across from Fat Apples) beginning a remodel. With these changes, we continue to strive to reduce our environmental footprint as a green-certified and carbon-neutral company. 

Learn about the history of the Hopkins and El Cerrito offices and reach out with any questions.
 

The new year for some begins with a list of dietary resolutions. One resolution gaining popularity is Veganuary. Veganuary for most is a time when the vegan-curious are encouraged to launch their own commitment to veganism or to at least try cutting out animal products during the month.

If you're a conflicted sushi lover, then we have an answer! You can enjoy vegan sushi from Tane Vegan Izakaya. If you've heard of Shizen and Tataki, located just across the Bay in San Francisco, then you'll know your tastebuds are in good hands. Chef Kin Lui, Chef Ramond Hi and Casson Trenor, an ocean conservation activist, banded together and after giving it a shot with purely sustainable seafood, realized they wanted to do more to help save our oceans. They opened a high-quality, all-plant-based sushi bar, so that as a vegan, you can still enjoy the classics such as gyoza, edamame, miso soup, ramen, poke salad, nigiri, classic and specialty sushi rolls all creatively made using only plant-based ingredients. As Kin, Ray and Casson have said, "E komo mai and irasshaimase," meaning "You are welcome here, whoever you may be." 

1956 Shattuck Avenue, Berkeley, CA 94704 | Open Sunday & Tuesday - Thursday 4:30 - 9:30 PM; Friday - Saturday 4:30 - 10 PM; Closed on Mondays | Instagram: @tanevegan