A Berkeley Home Just Sold 87% Over Asking; National Sellers Are Cutting Prices; Why Bay Area Buyers Cannot Trust the Headline
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The national housing story right now sounds pretty simple.
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More sellers are cutting prices.
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Homes are sitting longer.
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Buyers have more leverage.
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And nationally, that is largely true.
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But then Berkeley does Berkeley things.
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A three-bedroom Craftsman at 2129 Roosevelt Avenue was listed at $1.095 million.
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It sold for $2.05 million.
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That is about 87% over asking.
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Same country.
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Same week.
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Completely different housing market.
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And this is exactly why I keep telling buyers:
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Do not buy a national headline.
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Buy the property in front of you.
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I. THE NATIONAL MARKET IS GETTING SOFTER
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Across much of the country, sellers are adjusting.
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Realtor.com reported that price cuts reached four-year highs in September as mortgage rates moved back above 7%.
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More listings are aging.
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More sellers are reducing asking prices.
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And in many markets, buyers have regained negotiating power they did not have a few years ago.
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That is real.
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But it does not mean every buyer should walk into every California property expecting a discount.
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Real estate is too local for that.
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And the Bay Area may be the best example anywhere in the country.
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II. A BERKELEY BUYER JUST PAID $955,000 OVER ASKING
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Redfin shows the recent sale at 2129 Roosevelt Avenue in Berkeley closing at $2.05 million after being listed at $1.095 million.
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That is roughly $955,000 above list.
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The home is about 1,489 square feet with three bedrooms and two bathrooms.
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Now, before anyone says:
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“See! The Bay Area is insane!”
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There is a more useful lesson.
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The list price was not necessarily the value.
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Bay Area sellers and agents sometimes intentionally price attractive homes below expected market value to generate attention and competition.
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So a huge overbid does not automatically mean somebody wildly overpaid.
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It means the asking price and the likely market-clearing price can be two very different numbers.
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That is why buyers cannot build their strategy around:
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“How much over asking am I willing to go?”
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They need to build it around:
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“What is this property actually worth to the market — and to me?”
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III. SAN FRANCISCO AND THE INNER BAY AREA ARE STILL TIGHT
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Realtor.com reported that active listings in the San Francisco-Oakland-Fremont metro were down more than 16% year over year in July while national inventory increased.
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Homes were also selling faster locally than nationally.
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That is the opposite of what many buyers hear when they read broad housing stories.
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Nationally:
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More inventory.
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More price reductions.
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More negotiating room.
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In parts of the Bay Area:
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Fewer homes.
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Faster sales.
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Still-intense competition for the right property.
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Both stories can be true at the same time.
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That is why “Is it a buyer’s market?” is usually the wrong question.
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The better question is:
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“Is THIS property in a buyer’s market?”
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IV. THE PREAPPROVAL LETTER IS ONLY PART OF THE OFFER
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When a property gets this competitive, buyers tend to focus almost entirely on price.
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I understand why.
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But price is not the only thing a seller evaluates.
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Financing certainty matters too.
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If two buyers are close in price, a seller may care about:
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How far through underwriting the buyer already is.
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How quickly financing can be completed.
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Whether income, assets and credit have already been fully reviewed.
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How strong the down payment is.
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Whether there is appraisal risk.
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How experienced the lender is with the specific property type.
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And how likely the transaction is to actually close on time.
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This is one reason I like full TBD underwriting before a buyer finds the property when the situation warrants it.
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A basic preapproval says:
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“Based on what we reviewed, this buyer appears qualified.”
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A full underwriting approval can take that much further by getting the borrower through underwriting before the property is identified.
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That can matter when the seller has multiple strong offers and wants certainty.
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V. BUT DO NOT CONFUSE “STRONG OFFER” WITH “RECKLESS OFFER”
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This matters too.
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I am not telling buyers:
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“Just waive everything and offer $1 million over asking.”
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Absolutely not.
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A competitive offer still needs a plan.
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If the purchase price is significantly above comparable sales, we need to think about appraisal risk.
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If the buyer is using most of their available cash for the down payment, we need to think about liquidity.
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If the property is a condo, TIC, 2–4 unit property or something unusual, we need to think about the property financing before the offer is written.
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And if the payment only works if rates drop next year?
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That is not a financing strategy.
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That is a prediction.
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The goal is not merely to win.
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The goal is to win a property the buyer can actually close on and comfortably own.
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THE BOTTOM LINE
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There are two housing markets happening at the same time.
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In much of the country, sellers are cutting prices and buyers are gaining leverage.
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In parts of the Bay Area, the right property can still trigger aggressive competition.
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That Berkeley sale is an extreme example, but the lesson is not extreme at all:
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List price is not value.
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National headlines are not your neighborhood.
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And getting preapproved is not always the same as being ready to compete.
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So before making an offer, answer three questions:
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What is the property actually worth?
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What is the strongest financing structure we can reasonably offer?
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And what happens if the appraisal does not match the contract price?
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That is how you compete without losing your mind.
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Because winning the bidding war is great.
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Closing the loan is better.
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About Michael Belfor
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Michael Belfor is a Branch Manager and Loan Originator with approximately 24 years of mortgage experience.
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He has been recognized in American Pacific Mortgage’s President’s Club and among the company’s Top 1% producers since 2017.
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Michael works with homebuyers, homeowners, real estate investors and real estate professionals on conventional, jumbo, FHA, VA, down-payment assistance, self-employed and Non-QM financing, DSCR/investment loans, TICs, condos, renovation financing, construction financing and other complex mortgage scenarios.
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