December is a very busy month for most Lafayette residents. I am looking forward to seeing Mt. Diablo decorated with lights, the bustle of holiday shoppers at Diablo Foods and the many special celebrations that occur during this time of year. In a blink of an eye 2015 will come to a close.
Before we ring in 2016 let’s take a quick look at the trends shaping 2015. Local home price appreciation continues with a recovering economy and the continued trend of high-tech companies moving north to San Francisco, making Lamorinda accessible to a new group of tech workers. Through November 21st, the 2015 average home price in Lafayette is up 15% to $1,522,617 compared to $1,322,056 in 2014. In looking at Lamorinda as a whole the 2015 average sales price is up 10% to $1,372,884 compared to $1,240,835 in 2014.
I often hear from sellers that they have decided to stay put because they can’t afford to buy something else. This trend and lack of inventory is driving home prices up. In 2015 there were only 704 transactions in Lafayette compared to 832 in 2014. The lack of inventory means that too many buyers continue to chase too few homes for sale. Just this month a fixer in the Glorietta neighborhood in Orinda with a list price of $899,000 received 27 offers and 16 of those were all cash. Out of the top six offers four were cash. There is no doubt that in 2015 the cash buyer market continued to be strong. According to Roger Cruzen, freelance writer for California Association of Realtors, “23% of buyers paid all cash in 2015” nudging home prices higher and wedging out the first time home buyer requiring financing. The foreign buyer is contributing to the number of all cash purchases. According to California Association of Realtors 66% of international buyers paid all cash.
Affordability is a major concern across California. I constantly wonder how people, especially young families starting their careers, can afford to buy or even rent a home in Lafayette. If a potential buyer has saved enough to have the money for a 20% down payment, they also must have an annual income of $225,000, a 700 plus credit score and no other debt to afford an average home in Lafayette ($1,522,617). These numbers are at current interest rates that are only expected to rise over the next year.
With El Nino in the forecast make sure you clean your gutters and that your drains are clear of debris as soon as possible. If you need a referral for a vendor to provide this service please do not hesitate to email me.
I would like to wish you and your family a wonderful holiday season and a very Happy New Year. I am extremely fortunate to be a part of such a wonderful community. Please email me with your real estate questions or comments. I can be reached at email@example.com or by phone (925) 951-3817 if you would like a free home evaluation.