The Bay Area is Really Full of Real Estate Micro-Climates
I often find myself telling clients that the Bay Area is full of individualized real estate micro-climates. With buyers I am always hoping for bloated inventory and
inefficiencies in different local markets that can be used to minimize their cost and maximize future property values. With sellers I am always looking for periods of slim inventory and positive market conditions to maximize their sales price and current value. Some of my clients are selling in one area and buying in another which makes their predicament all the more complicated.
There have been many times I have read articles and looked at data that makes our markets seem similar and flat. The reality is that the Bay Area is an amalgamation of complex micro-climates and that the job of a Realtor is easier said then done. Altos Research shows this trend in their real-time median price data graphs shown above. This is a great visual representation of how 6 different Bay Area cities median price data can look. It is also a great representation of what a Realtor must navigate in order to serve their client’s best interests. These 6 cities are only several miles apart in terms of geographic location, but they are worlds apart in terms of market micro-climates.
August 11th, 2007 at 5:50 pm
Interesting article! I am glad to see Oakland on the rise
I wonder what is causing such discrepancy.
August 13th, 2007 at 3:40 pm
It is my belief that this happens, because supply and demand are never totally smooth. One week there may be a glutton of buyers that want Oakland while there are none that are interested in say El Cerrito.
The other explanation may be in the fact that others are constantly acting on the market. Take real estate agents for instance. A more direct effect that agents cause by their action can be seen in August. This is a time when agents tend to go on vacation. Since more than 90 of all homes are sold by agents, our markets tend to slow in August. Understanding this effect shows how those transacting or not transacting in the market can change the market itself.
Thus it is hard to say exactly why one area is up while others are down without a closer inspection of the specific situation, but we can say that our real estate markets have many inefficiencies, that creates individual micro-climates.