Real Estate Articles

Home : Publications : Real Estate Articles

REALTOR®: As market softens, now is good time to buy a home

Monday, September 17, 2007

A real estate information service reports Bay Area homes sold at the slowest pace in 15 years last month as market uncertainty intensified, forcing more buyers, sellers and lenders to the sidelines. But the reality is many markets in Northern California are doing well and now is actually a good time to buy a home, according to California Association of REALTORS® (C.A.R.) President Colleen Badagliacco.

“Bad news gets eyeballs. … It’s turned out to be a media cycle drama and Realtors just have to have a conversation with consumers and bring the numbers and information to them,” said Badagliacco.

The C.A.R. president says the Bay Area is leading California’s housing market, with just a relatively small portion affected by subprime lending problems and foreclosures, compared to the rest of the state. She notes, unlike the economic slump in the 1990s, where the state experienced massive job losses, “the bottom line is that we are adding jobs and the economy is strong. We know that things are not that bad in Northern California.”

City of San Mateo officials will agree with Badagliacco. Addressing members of the San Mateo County Association of REALTORS (SAMCAR) recently, San Mateo Councilman John Lee announced, “In the last 12 months, over 800 new businesses have taken new licenses in the city. It speaks well of our business climate.”

DataQuick Information Systems reports a total of 7,299 new and resale houses and condos were sold in the nine-county Bay Area in August, down 1.7 percent from 7,423 in July, and down 24.9 percent from 9,713 for August a year ago. Solano County, with sales down by 42.7 percent and Contra Costa County, with sales down 35.6 percent, experienced the largest drop in sales.

The counties of San Mateo, San Francisco and Santa Clara, however, are not seeing the declines in sales volume or median price as other places in California. These counties experienced the smallest declines in year over year sales last month, with San Francisco, down 13.8 percent; San Mateo, down 16.1 percent; and Santa Clara, down 15.3 percent.

The median price of homes continues to increase in these areas as well, Data Quick reported. The median price for all homes in San Mateo County was up 4.4 percent to $788,000, compared to the prior year. In San Francisco County the median climbed 7.8 percent to $822,000, and in Santa Clara County the median rose 4.2 percent to $700,000.

Badagliacco says the other reality continues to be “real estate is an excellent investment, but if you plan to flip the house in a few months, maybe you ought to rethink your strategy.”

SAMCAR President Geoffrey Craighead goes a step further and will have his clients read the book The Richest Man in Babylon, by George S. Clason. “The book indicates the first thing a man should do is to secure shelter and you do that by buying a house,” explains Craighead. “Buying a home is the best step a young couple can make because it’s the fastest way to gain financial security.”

Craighead says homes in California have experienced an average 20 percent appreciation over 10 years, and more than that in the last recent years. While the double digit appreciation may not be happening today, he believes “as long as the demand for homes in the area exceeds supply, homes will always appreciate in San Mateo County.”

Both Badagliacco and Craighead advise those who can to take advantage of current market conditions.
“As rents increase, you need to take a closer look at the renting versus buying equation. If you can save and build some equity, you should take advantage of the softer market,” says Badagliacco.

Craighead adds, “The traditional lending practices remain solid, just as real estate will always be a good long-term investment. If you have the four Cs intact - Cash, Credit, Collateral and Confidence, you will do all right to take that plunge.”

The San Mateo County Association of REALTORS® (SAMCAR) is a professional trade organization representing over 3,800 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula. SAMCAR 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 San Mateo County.

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 Julie Ziemelis, Director of Public Affairs, e-mail , or phone (650) 696-8214.

» Back to Real Estate Articles