You are here on blog number three of my “What the Money Bought” series. To read the other two that I’ve done previously in the city of Alameda, click here: $1 million, $1.5 million. But for today, we’re talking about the $2million price point. We will talk about what you can get for this price point if you’re buying a house in Alameda. We’re also going to look at a few trends. And, hopefully, that will help you understand the higher-end price point of Alameda’s real estate market.
An Overview of the $2M Price Point
So let’s go ahead and look at the price point of $2,000,000. Like I did previously, I took the data from this price point and put it into the same style of spreadsheet so we could check out what the differences are. Now, there is one caveat to this: there aren’t as many properties that were sold at this price point. In three out of the four years that I’ve checked, only two properties were right at that $2 million price point. In addition, the highest number of properties sold at $2 million, which happened in 2019, was just five. This means the data is more influenced by one property compared to other price points. Nonetheless, you’ll still see a couple of trends here, which I think are important to point out.
Days On Market
Let’s begin with the average number of days-on-market (DOM). In 2018, the average DOM of the a house in Alameda was 17 days. On the other hand, it took 15 days for homes worth $2 million to be sold in 2019 and 47 days in 2020. This year, so far, has the lowest DOM yet with four days. Simply, the properties that sold at this price point took a lot longer to sell on average. But again, we had an outlier in 2020, and then we also had one off-market property that was sold in zero days. So that property didn’t even hit the MLS technically, but it’s still showing up in the data for 2021.
Beds and Baths
However, what’s interesting this year is that you are losing, on average, half a bedroom compared to 2018. We started at an average of 4 bedrooms per house three and a half years ago. And then, the following two years saw an increase, with 4.2 beds and five beds, in 2019 and 2020, respectively. Obviously, the trend here is a little sporadic.
Then, with the number of bathrooms, the trend is also similar. On average, the number of baths decreased slightly, with this year’s having 2.75 baths compared to 2018 which had three baths per house. Houses sold last 2020 at around $2 million also had three baths. In 2019, the average $2 million house had only 2.4 bathrooms. So, in those four years, you’re kind of in the two and a half to three bathroom world.
So far, the most apparent difference or fluctuation in the numbers is the average square footage of the houses. The square footage started with an average of 2,482 ft.2 in 2018. Meanwhile, in 2019, on average, houses had an area of 3,056 ft.2, and in 2020, houses had an average area of 3,225 ft.2. Then this year, the average dropped again to 2,239 ft.2, which is so far the smallest of those four years.
It’s not wrong to say that the square footage is going down a little bit compared to where it started in 2018. However, compared to the last two years when it popped up, that’s a pretty significant difference in terms of area. If you think about it, that’s almost a thousand square foot difference compared to the previous year.
Price per Square Foot
For the price per square foot, unfortunately, we can’t tell much about that price point based on just a couple of sales. Nonetheless, what you can see here is that the price per square foot undoubtedly trended upwards this year. This year has the highest price at $896 per square foot amongst those four years.
It might not seem like a significant increase compared to the price in 2018 of $813 per square foot. But we know that it dropped pretty significantly beginning in 2019 at $669 per square foot and $591/ft.2 in 2020. And granted, we also had some pretty big houses sold in those two years. Still, it doesn’t change the fact that it has increased dramatically from last year. If you ask me, a $222 per square foot leap in just a year is still a big deal.
Pricing Strategy: List Price vs. Sales Price
Another thing that I think is really fascinating is the pricing strategy. Like what I’ve done in the previous blogs, we’ll look at this together through the % difference between the prices.
The pricing strategy used to be very transparent at the $2M price point. According to the data, in 2018, on average, houses at that $2 million mark were sold for 11.58% over their asking price. On the other hand, the final sales prices of homes in 2019 and 2020 were 3.95% and 2.04%, respectively, over their asking prices. This year, however, we’re looking at 43% over their asking price.
That non-transparent thing used to be very prevalent at the high end. People would list their houses very close to or just below what they actually wanted to sell the houses for. But as you can see from the numbers for this year, that is not the case anymore. Granted, this is just for two houses. However, this is still a trend that I’m seeing take hold on the high end. People are now listing at $1.4 million and then getting up to $2 million for the final sales price. Now, that’s not every single house in Alameda listed at $1,400,000, but right now, this is something that is very true here.
Number of Properties Sold Above $2M
Lastly, the other thing here in Alameda that I think is fascinating is the number of properties sold above $2,000,000. In 2018, only eight properties out of 637 were sold for more than $2,000,000. You’re talking about the top 1.26% of the market right there. In 2019, 1.13% of 619 properties were sold above that same price point. On the other hand, 16 properties, or 2.56% of 624 total, were also sold for over $2,000,000 in 2020. Today, so far in 2021, 25 properties out of 505 units have sold above that $2 million price point. That is nearly 5% of all the units sold in 2021 so far. It means there’s a consistent rise in price points here in the city of Alameda. And it is really an interesting trend to see.
Even though there’s not quite as much data, meaning not as many houses sold at that $2 million, and as a result, a few of those data points are skewed a little bit, you can see the trend here. First, the high end of Alameda is pushing up. And second, the pricing strategy is changing pretty dramatically. What used to be a very transparent strategy is now becoming a very non-transparent strategy. Things are now selling substantially over their asking price at that higher price point.
I see these two trends across $2,000,000 and even in the upper $1.7 million to $1.9 million world. Before, properties at these price points used to sell very close to their asking price. But now, things are selling well over their asking price. Before 2021, it’s a strategy that used to happen, more or less exclusively, in the lower entry-level price points. However, now, it is also taking hold at the high end.
Keeping all this in mind, make sure that you do your diligence if you’re in that $2,000,000+ price point category. If you’re planning to buy a house in Alameda at this price point, please don’t waste a lot of time looking at properties listed at exactly or very close to $2 million because they will probably sell above that.
Also, if you want to talk about how to determine the price point, understand the market, or just Alameda, in general, just hit me up. My information is below. I’m happy to field questions or help you get educated and step up to the plate. And hopefully, you can be successful when you do take that swing.
I hope my blog on what $2M can get you in a house in Alameda has helped you.
Need more tips to help you succeed in the East Bay Real Estate Market?
Sign up for Two Minute Tuesday–market updates and stories about East Bay real estate (with the occasional puppy picture) from Hans and Kristin in two minutes, once a month.