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REALTOR®: Local Realtor Officials Assess Silicon Valley’s Housing Market Potential

Wednesday, December 26, 2007

As a new year approaches, members of the Silicon Valley Association of REALTORS® (SILVAR), a professional trade organization representing over 4,000 Realtors and affiliate members engaged in the real estate business on the Peninsula and in the South Bay, conclude even as many in the industry consider 2007 a tough year, the market in this area has performed well, and they expect to it to continue to do well through 2008.

"This year we saw the foreclosure rate peak across the state, and while these figures are disturbing, it is important to understand how great we have had things in Silicon Valley and how great things are right now going forward," says SILVAR President Mark Burns, a Realtor with Coldwell Banker in Cupertino.

Burns, who has been a Realtor for over 20 years, concludes his stint as 2007 SILVAR president at the end of the year. He remains upbeat about the market and sees the dichotomy of east and west areas in Silicon Valley continuing through next year, with home prices in the east side generally being flat and a number of homes on the west side communities of Palo Alto, Menlo Park, Los Altos, Cupertino, Saratoga, Los Gatos, Willow Glen, Almaden Valley receiving multiple offers.

The communities doing well are those with good schools, superb commute location, and a reasonable mix of shopping and services within a few blocks in every direction.

"Folks will pay for what they perceive as value," notes Burns. "When school scores improve and neighborhoods gain in the owner occupancy rates throughout the rest of the Valley, prices will rise there too."

SILVAR Board Director Gary Bulanti, who is a broker associate with Alain Pinel Realtors in Menlo Park and was named SILVAR's Realtor of the Year early this year, is also upbeat. "Most of what we read doesn't speak directly to our mid-Peninsula market," says Bulanti. "We are extremely fortunate to live where we do; other places in the state are in dire straits. The market here is doing very well. While the numbers of homes sold have gone down, prices have held steadily this year compared to last year."

Several conditions need to be in place for a market to be stable and Silicon Valley has them, according to Bulanti. "Local employment is on the rise; there is relatively cheap money available in terms of interest rates, which are still low; and we have a relatively low level of inventory. As long as those conditions are in place, the market is stable," he says. "These conditions are not all present everywhere, but they are present here."

So what would be their advice to home sellers?

"If you are ready to move on to the next chapter in life, move. There is great value moving at the pace you want, rather than forcing yourself into what you think might be the 'perfect strategy,'" says Burns. "Don't look back. You might just see prices go up after you're gone and think, 'What if . . .' On the other hand, what if you waited and couldn't sell, or the home you wanted to buy is gone, or you missed your grandchildren growing up, or ended up with health issues that prevented you from enjoying your new home and neighborhood?"

Bulanti says, "Do everything you can do to make your home as attractive as possible. Buyers are out there, but can afford to be more selective these days."

Both stress in this type of market it is more important than ever to look to an experienced Realtor.

"Knowledge of the market and its inventory is critical because the dynamics are not necessarily the same everywhere," according to Bulanti. "The negotiating skill of the Realtor becomes critical. You need a Realtor who will provide the experience and ability to move quickly for property that will go fast and to move in a circumspect fashion for property to be negotiated. The fact that your Realtor is known to other agents and is respected goes to your benefit as a seller or buyer."

To homebuyers, Burns advices, "If you can, buy now. So often we see buyers waiting for that dip in rates or that slight decline in the market. You'll never know the bottom of a market until it spikes and everyone runs in, thinking they are too late. No one buys at the bottom of interest rates or the bottom of home prices. They buy just above it when they realize they missed it."

Bulanti agrees. "You can only see the lowest point in the rearview mirror," he said. "For homebuyers the cost of money is always the true cost of the house. If you find the house you want, get it. You are best served as a buyer if your plan is long-term because that will allow you to ride out whatever glitches that may occur in the market in the immediate future."

As for the future, Bulanti says, "I don't have a crystal ball, but if conditions stay as they are, there's no reason not to think the market will stay stable and perhaps evolve into a more seasonal market."

Burns predicts "more of the same" for 2008. "This next year will be very similar to what has gone on for 100 years in the Bay Area," says Burns. "Things will be just slightly, almost imperceptibly, better than they were this year. Perhaps the next two to three years will be a little slow; perhaps not. Overall, prices will be significantly higher in 10 years than they are now. The population of the Bay Area will be much larger, interest in downtown and city property will be higher and people will focus even more on getting the best schools, being close to work, shopping, and cultural activities."


The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.

The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.

Variations of this article have appeared in local area newspapers.

For further information, please contact Rose Meily at SILVAR Public Affairs, email , or phone (408) 200-0109.

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