I live in Lafayette, was raised in Moraga and my office is in Orinda. I’m currently in the Top 20 for all of Prudential 2008. I know the market well! Here are my thoughts:
When you analyze the MLS sales, AVERAGE prices in Orinda year to year were down about 5% all of last year and unit sales were up about the same amount at 5%. This is pretty flat if you think about it. There is still demand for Lamorinda.
The strength is in the smaller homes. The entry level homes in Lamorinda have a stronger demand whereas the higher end homes have been sitting on the market longer and have dropped their prices more dramatically. In some cases, the lower end homes have appreciated. The 4BR homes are off a little bit more than 3BR homes from a year ago due to this reason.
Any time the market in Lamorinda adjusts, the trends show that the high-end homes are the first to drop and when they do, their prices adjust significantly. People still want Lamorinda for the schools and when they do, they will get in as inexpensive as they can in the lower end market. The same happened in 1990, prices in Orinda dropped approx. 20%....the larger high-end homes were soft and the lower end homes continued to increase in price. The same thing happened in Lafayette last year; Lower end homes actually appreciated and the higher end homes depreciated in price.
I hope this helps! I can give you exact statistics and recent sales for specific locations if interested.
In this kind of a market, if you are looking to upgrade and move up, this is the perfect time to do it.
Take a look at the Q4 2007 stats for Contra Costa County pulled by Prudential. Very insightful: http://www.thewebtop.com/docs/Q4-07-ContraCosta.pdf
You can read more about me at http://www.MyHousingGuide.com/about