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Published on 07/15/1996 All articles from this issue

A rousing first half for local real estate companies

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By Bill Briscoe

Special to the Town Crier

The extraordinary demand for homes in our area, together with a relatively short supply of homes for sale, has given our area a strong first-half performance. The Los Altos area is almost 50 percent ahead of last year. All indicators point toward 1996 being the best year in the last decade.

For sellers, the favorable demand curve has also driven up prices. With many transactions being multiple offer situations, transactions are akin to an auction with selling prices being greater than the listing price. In north Los Altos particularly, the price level appears to be at or above the previous high watermark of mid-1989. The rest of Los Altos is close behind and could well hit the mid-1989 level by the year's end. Los Altos Hills prices are up, but not the same extent as Los Altos, despite the 55 percent increase in unit sales.

With all the activity, it stands to reason the days on the market figure is much lower. In June, for instance, the average number of days from listing date to sales initiation was only 29 days for Los Altos.

The year-to-date figure is 62 days, indicating activity is at a much quicker pace now. Los Altos Hills had a 105-day figure for June as opposed to 117 days for year-to-date.

Many home owners are breathing a little easier now. These are the owners who bought their homes when prices were at or near their previous peak. The drop in prices between 1989 and 1994 of approximately 25 percent found many of them with no equity by the end of 1993. If they hung on, however, they are now back in the position of having their original equity plus, perhaps, a little more.

As for the real estate industry, the top four companies had more than three-quarters of the sales in Los Altos and more than two-thirds of the sales in Los Altos Hills. The dominance of the "Big Four" has been evident for some time and seems to be gaining strength. The leader has a little more than 25 percent of the market while the other three are a little more than 15 percent.

In their early July meeting, the "Fed" took no action on rates. That means rates should be stable over the near term.

Sales by price indicate the leader does well in all price ranges. Two of the four do reasonably well in all ranges, while the fourth company appears to specialize in medium to low price sales.

Now is the time to buy or sell. The economy is strong, funds are available, rates are low and the general outlook is good. If you have been waiting to sell your house for the right time, it may well be now.

Bill Briscoe is a past president of the former Los Altos Board of Realtors and is a broker with Cornish & Carey in Los Altos.