Despite rising rates, East Bay home sells for $1.5 million more than asking

EL CERRITO (KPIX) — Another Bay Area home sold for more than $1 million above asking price.

A house in El Cerrito was listed for $1.295 million and, after 10 days on the market, sold for $2.45 million, $1.155 million above the asking price.

The house received 11 offers ranging from $205,000 to $1.155 million above the asking price, according to a Compass spokesperson.

“It was a Mid-Century Modern. Mid-Century Modern has a following in the Bay Area,” said listing agent Kevin Tannahill. “It was a unique house, which is what drove the price up.”

Another factor that likely contributed to the price rise, says Tannahill, is strong buyer demand despite rising interest rates.

“Even with the interest rate hikes and so on, the market seems to keep going, simply because there’s no supply here right now,” he said.

David Stark of the Bay East Association of Realtors says that in terms of asking price, they’re still seeing record prices.

“Buyers are certainly still willing to pay high prices no matter what the interest rates are,” he said.

However, Stark sees some signs that could indicate a cooldown is coming.

“In terms of the number of buyers in the market, we’re certainly starting to see a slowdown there. We’re starting to see what I would describe as some buyer fatigue,” he said. “The number of pending sales, which are deals that were made in a particular month that could result in a sale the next month, we’re seeing a drop off a little bit from March compared to April.”

He believes rising interest rates will inevitably have an effect on East Bay homebuyers as well.

“We saw what historically low mortgage interest rates did to buyer behavior. Many buyers in the market were willing to pay super high prices and raise those sales prices,” he said. “So it stands to reason that we hit a certain tipping point with interest rates where those monthly payments are unaffordable or the perception is that they’re unaffordable and we see buyers start to pull out. It’s actually possible that we’re starting to see that now.”

But if a cooldown occurs, he doesn’t think it will lead to a drastic change in market dynamics.

“Do you see a big change in market dynamics? I don’t anticipate that,” Stark said. “I think a slowdown, where houses may be on the market a little bit longer and we may see some price stability, that’s the flavor of the market correction I see coming.”

Despite buyer fatigue, Tannahill says sellers are still in the driver’s seat.

“The desirability of properties and the bias between supply and demand continues to work heavily in favor of sellers,” he said.

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