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Published on 03/08/1999 All articles from this issue

Realtors say buy a home now

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By Clyde Noel

Special to the Town Crier

Unless you're one of the lucky few who can cash in their stock holdings, the longer you wait to buy a home in the Los Altos area the harder it will become.

"In the 12 years I have been in Los Altos real estate, I have never experienced the appreciation of homes like we have today," said Gary Wheeler, vice president and manager of Alain Pinel. "We are back to multiple offers with anywhere from three to six offers on a property that is priced right."

It's not just the Los Altos/Los Altos Hills area that is booming. With the 1998 price surge of 15.3 percent, Realtors are expecting another banner year. It should be a year where sellers can earn a healthy increases over their cost basis if they sell, or continued appreciation for home owners not selling their property, according to the California Association of Realtors.

Realtors say rising property values are not pricing people out of the market. The success of Silicon Valley companies has created a young professional able to make huge deposits on a property by selling their stock options from Silicon Valley Initial Public Offers (IPOs).

Realtors say it's not unusual to receive buyers with huge down payments.

It's easy to purchase a million and a half dollar home with that type of deposit because afterward buyers have a normal mortgage to handle, realtors say.

"We had one of the worst shortages of homes last year and the inventory was the lowest we ever had, but inventory in our area now is at an all time low," Wheeler said. "It's a tight market with high prices and we are in one of the most difficult places to purchase a home in California."

High housing prices reflect a demand to buy a house, but according to Wheeler, people are not leaving the area because of Proposition 13. Few residents are interested in moving away from our area unless they have to. Their homes are usually paid for and the only expense is upkeep and taxes. Before they move they need to find a comparable situation and that's extremely difficult.

George Monaco, vice president of Coldwell Banker, said the appreciation and demand for homes is incredible right now.

"We just had a house that was considered affordable by many buyers and it received 22 offers over the listing price," Monaco said. "The house was attractive, well maintained and priced right."

"When a property has multiple bids from four or five bidders, only one bidder gets the prize," Wheeler said. "That means we still have a housing demand for the four or five who didn't get the property."

Wheeler said during this usual spring home buying period, prices in the Los Altos area will go up 10 percent between now and May 15 and then fall back to about three percent increase over present prices during the summer months. Those predictions are similar to a forecast indicated in the Northern California Real Estate Report.

According to Wheeler, people want to move to Los Altos because the town has a lot to offer new residents.

"Los Altos has been revitalized with the entry of new restaurant tastes and updating the service industries." Wheeler said. "We are no longer in a second position to Palo Alto, people prefer to move here because it's a great place to live with a family."

There's a few things people might want to consider prior to searching for a home in this area, Wheeler said.

"Before a person starts looking for a home they should be prequalified for a mortgage," he said. "They should find out the price range of a home they can afford. Once that is established, they should contact a Realtor immediately."

Another reason to buy now or to refinance a mortgage is the possible increase of the mortgage rate above 7 percent. According to Freddie Mac, the second-largest provider of mortgage funding, rates are going up and may reach as high as 7.25 percent. Rates have been below 7 percent since last June.