March 27, 2013

The Bay Area is “Ground Zero”

Real Estate “Flash Sales” Prove Market Is Hot

If you’re looking for a home in the Bay Area, you will probably need two things on your side: luck, and a lot of cash.

Those who aren’t willing to compete with up to dozens of other offers on a home are now trying to buy it – hours after it’s listed on the market.

The new trend has been dubbed by realty experts as “flash sales” – any sale that happens within 24 hours.

For example, a home in East Palo Alto on Gates Street was put on the market on March 19. It got nine offers the same day and sold for above asking price within 24 hours.

Glenn Kelman, CEO of online real estate brokerage Redfin which is set up in 19 U.S. markets, said that trend is growing in the Bay Area and calls it “Ground Zero” for an incredibly hot housing market, one that experienced an incredible boom at the start of 2013 in January.

I hate to be the kind of person who brags, but… well… told you so.

Oh, I forgot. We’re in the Bay Area. I need to humble brag.

I’m so amazed and honored to be proven right.

The Bay Area is back, baby. It’s Ground Zero!

Just how special?

Ken DeLeon, a realtor, said his latest listing is a 1200 square foot home in Palo Alto that he just put on the market Thursday. “The amazing part is just within 24 hours, we already had a client with a Chinese all-cash buyer offer us more than 300,000 above and we said, ‘No thank you, please wait,’” DeLeon said.

He and other realtors said they’re still catering to those wealthy foreign buyers, mostly from China and Russia; however, with historic-low mortgage interest rates and an inventory that’s also hitting record lows, they said the competitive cash offers are no longer limited to the high-end homes.

Hey Realtors – I gotta tip for you: Price the house in RMB. Why? There’d be even more opportunities to add 8’s to the price!

“There are sometimes traffic jams outside open houses,” said Kelman. “Folks get worried they can’t wait for the offer deadline on Sundays, so they make a preemptive strike to try and buy it on the spot.”

Forget waiting 3 hours to eat brunch at Mamas, or camping out 3 days to enroll your kids into pre-school… now you have to camp out a week to attend a open house.

Hold on for a sec.

I had to get a kleenex.

The tears won’t stop flowing.

This is so beautiful.

The Bay Area is back. Better than ever.

This is the year where the $ per square foot in the Real Bay Area will beat the average $ per square foot for Manhattan. You heard it here first.

Comments (10) -- Posted by: burbed @ 5:09 am

10 Responses to “The Bay Area is “Ground Zero””

  1. PK Says:

    Well, there’s only one thing left to ask! What’s the cheapest way to withdraw from the ATM? (This is a question grounded in reality)

    1) Cash out refinance
    2) Normal Refi + HELOC
    3) Normal Refi + HEL
    4) Something exotic I hadn’t considered.

  2. SEA Says:

    “This is the year where the $ per square foot in the Real Bay Area will beat the average $ per square foot for Manhattan. You heard it here first.”

    Isn’t RBA worth at least double Manhattan in $psf terms?

    Just a moment while I check my RBA map…

    Here it is. Oh, yes, it does appear that the RBA is already over double Manhattan in $psf.

    Recall: The RBA expands and contracts to make all things possible. On the other hand Manhattan does not expand or contract to make anything possible.

    It might be time to hire the homeless to camp out in front of all RBA open houses. That way I can ensure the first opportunity to bid…

  3. nomadic Says:

    Forget the RBA… Flash sales above asking in East Palo Alto?

  4. peanutbutter Says:

    I went to an open house recently here in the east bay and there were at least 10-15 couples waiting for it to actually start. Apparently there had already been an offer the night before the first open house. Its nutty here as well.

  5. Ricky Says:

    Yes, and at least one house is worth $1,116,696, according to Zillow anyway.

  6. sfbubblebuyer Says:

    Forget the RBA… Flash sales above asking in East Palo Alto?
    It’s how you commit suicide and still get the insurance payout. Buy in East Palo Alto, and go out on your front lawn and yell at gang bangers at 3 a.m. Then your family can use the payout to buy in the RBA! Just make sure you’ve jacked your insurance up to over 6 times ‘not a lot of money’ so you can get into the crappy section of REAL Palo Alto.

  7. mtv-renter Says:

    I’ve been trying to buy a house, and this article completely jives with what I’ve seen. For example, I offered 15% over asking on a house in Mountain View, and a cash offer way above that trumped mine. As someone who would need to mortgage myself up to the eyebrows to buy an entry level home, I can’t compete with this.

    Open houses are stuffed to the brim with interested buyers, and large number are Chinese or Taiwanese (at least in Mountain View, Sunnyvale and Cupertino), definitely more than local demographics. My guess is that these are representatives for foreign buyers.

    I rent in the Los Altos school district part of Mountain View, and when the occasional house here goes up for sale, 20-50 offers seems to be the norm right now, and most go for cash offers, and we’re talking houses in the $1.5-2M range!

    Crazy, but our housing is cheap for people from, say, Beijing or Taipei, not to mention tech millionaires.

  8. Jb Says:

    Wayyyyy out in the east bay here – definately seeing some crazy behavior….but then again since its not RBA every now and again something does sit a bit on the market and (gasp!) there is a (whisper voice) price reduction. But that’s not very often. Those early bids are being called preemptive offers over here….but not all agents seem to go for them. We too hope to buy soon – but we will need some luck – even a freeway/bridge/Bart away from the RBA.

  9. SEA Says:

    “Flash sales above asking in East Palo Alto?”

    It’s so crazy out there that the RBA is expanding to include parts of EPA!

    CRAZY!

  10. peanutbutter Says:

    We bought in the east bay last year. We simply found a house we liked and submitted an offer. Done. I am about 99% sure that if we were looking now there would be no chance we would be able to buy anything if we wanted to. There’s simply too much competition. Prices have also gone up a bit as well. A lot of friends of ours who were looking stopped altogether. There’s really no point.

    Hopefully inventory will loosen up a bit.


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