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Buy Now While Conditions Remain Favorable, NAR Advises

Wednesday, November 15, 2006

The National Association of Realtors® is advising home buyers to buy the home of their dreams now before the market changes. Interest rates have fallen seven months in a row and are near 40-year lows, inventories of existing homes are higher than they have been in decades and prices have stabilized. According to NAR, these are perfect conditions for buyers, but they are likely to change as sales pick up, prices gain traction and conditions improve for sellers next year.

The national median price of homes bought 10 years ago has increased 88 percent. The number of U.S. households is expected to increase 15 percent during the next decade, creating a continued high demand for housing, NAR officials report.

"The market is much better than you might hear or read," said NAR President Thomas M. Stevens. "Consumers should take advantage of this perfect alignment of low rates and extraordinary inventory before market conditions change."

Homeownership is a safe and secure way to build long-term wealth, according to Ron Gates, Silicon Valley Association of Realtors® (SILVAR) board director and California Association of Realtors® (C.A.R.) regional director.

"Buyers have more options today than they did a year ago. They just need to make sure they work with an experienced and knowledgeable agent," said Gates. "On the other hand, sellers need to understand it was an explosive, unreal market we've had the last few years. They now need to be realistic and make sure their prices are based on the market place today."

There are many positive developments in the Silicon Valley area which point to a healthy economy, said Gates.

"There are more jobs in the Silicon Valley area. Venture capitalists are pumping more money this quarter in the Silicon Valley area," he observed. "These huge investments and new startups create new jobs, which will in turn filter to the real estate market."

A broker with Alain Pinel Realtors in Los Gatos, Gates said in a recent meeting of C.A.R. regional directors, the housing market in different parts of the state was discussed and it was noted that overall, the Bay Area's housing market, particularly in the Silicon Valley area, is doing well compared to other areas in the state.

"Homes here are still appreciating, and though volume of sales has dropped, it's not anywhere near the drop in other market areas in the state," Gates indicated.

C.A.R. recently reported home sales in California decreased 31.7 percent in September compared with the same period a year ago. Also, the median price of an existing, single-family detached home in California during September 2006 was $553,050, a 1.8 percent increase over the revised $543,510 median for September 2005.

C.A.R. president Vince Malta said, "Unsold inventory is holding steady, and is close to the long-term historic average typical of a more 'normal' market."

C.A.R. and  RE InfoLink, the multiple listing service for Santa Clara County and four other California counties, both indicate the median home price in Santa Clara County is still moving upward. The median price for a single family home in Santa Clara County was $769,000 in September 2006, up 4.9 percent from $733,000 in September 2005.

Los Altos, Los Gatos and Cupertino made the list of cities with the highest median home prices in September. Los Gatos topped the list of cities with the greatest median home price increases.

Statewide, the 10 cities and communities with the highest median home prices in California during September 2006 were: Los Altos, $1,545,000; Manhattan Beach, $1,465,000; Newport Beach, $1,350,000; Burlingame, $1,330,000; Los Gatos, $1,212,500; Rancho Palos Verdes, $1,150,000; Danville, $1,014,500; Cupertino, $968,750; San Clemente, $940,000; Santa Barbara, $917,500.

Statewide, the 10 cities and communities with the greatest median home price increases in September 2006 compared with the same period a year ago were: Los Gatos, 38.6 percent; Delano, 31.7 percent; Paramount, 26.9 percent; Inglewood, 24.5 percent; Colton, 23.8 percent; Barstow, 22.4 percent; San Juan Capistrano, 21.8 percent; Irvine, 19.1 percent; Lake Forest, 15.4 percent; Compton, 14.9 percent.

"We don't expect to see any changes of note until early next year when we're likely to see a modest lift to home sales," said NAR Chief Economist David Lereah. "The market currently is a little lower than expected as buyers try to time their entry. In the meantime, there's some buildup in demand that will move when consumers realize that conditions are optimal for them."


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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