"If you want new construction, demand will soon outstrip supply, but other factors such as interest rates and availability of home loans will also have an effect," Zeger said. "Year-over-year sales are up for the second straight month in many markets, such as Contra Costa County and specifically, Walnut Creek, along with price increases from Oct. 2009 to Nov. 2009 of 8.5 percent."
Inventory of new condos priced less than $729,000 is not being refilled, he says, so current sales are depleting inventory rapidly, and are likely to raise prices for remaining product. To back up his thesis, Zeger points to three projects in the East Bay, all of which it represents.
One such property is 555YVR, an 87-unit boutique condominium development next to downtown Walnut Creek and the BART station. One-third of the units were under contract when closings began there in October and sales are expected to accelerate in January when the property will be able to offer FHA loans. The average price–per-square-foot is $467 at 555YVR versus $310 on average for all condos in Walnut Creek.
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