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Homebuyers Should Take Action Now While Conditions Remain Favorable, NAR advises

Monday, November 6, 2006

The National Association of Realtors® is urging home buyers who have been waiting to buy the home of their dreams to act now before the market changes. NAR points out that 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. But the perfect conditions for buyers are likely to change as sales pick up, prices gain traction and conditions improve for sellers next year.

Homeownership is a safe, secure way to build long term wealth. 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, according to NAR officials.

NAR President Thomas M. Stevens said, “The market is much better than you might hear or read. Consumers should take advantage of this perfect alignment of low rates and extraordinary inventory before market conditions change.”
San Mateo County Association of Realtors® (SAMCAR) President John Gieseker agrees, noting many positive developments in the Bay Area’s economy. “Economy-wise, things are good in the Bay area – interest rates are still low, job creation is up, especially in higher skilled well paying jobs.”

Gieseker, who is a broker and vice president of Prudential California in San Bruno, said, “Buyers have more options today than they did a year ago. If you’re a long-term investor, or intend to stay in your home for a while, now is the time to buy. Remember, the contrarian investor always goes in the opposite direction as the crowd.”

The California Association of Realtors® (C.A.R.) reported home sales decreased 31.7 percent in September in California compared with the same period a year ago, while the median price of an existing home increased 1.8 percent.

“Unsold inventory is holding steady, and is close to the long-term historic average typical of a more ‘normal’ market,” said C.A.R. President Vince Malta.

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. reported.

Despite reports of a dip in home sales and median home prices in some areas in the state, sales statistics show an increase in home sales as well as a rise in median home price in a number of cities in San Mateo County.

“There’s been a lot of activity and demand for homes in San Mateo County, particularly in Belmont, San Carlos, San Mateo, Burlingame, Redwood City, remains strong,” San Mateo Realtor and SAMCAR Board Director David Zigal observed.

Information from REInfoLink shows sales up in September in Belmont, Burlingame, El Granada, Hillsborough, Half Moon Bay, La Honda, Pacifica, compared to the same period a year ago. The median price of homes in Brisbane, El Granada, Foster City, La Honda, Milbrae, Menlo Park, Redwood Shores, San Bruno, San Carlos, South San Francisco and Woodward was up in September 2006 compared to the prior year.

According to C.A.R., 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.

NAR reported the Pending Home Sales Index, based on contracts signed in September, slipped just 1.1 percent to a level of 109.1, following a 4.5 percent gain in August. The index is derived from pending sales of existing homes.

David Lereah, NAR’s chief economist, said “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. 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.”

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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.

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