Tuesday, October 30, 2007

It's a buyer's market, but not for long

This is a great time to be a buyer. Interest rates are low, inventory is high, and prices on some properties are coming down. This is the kind of opportunity every buyer looks for. So, how long will it last? Not long.

The inventory of single-family homes in Los Altos as of last Friday was 53 homes. This is about 70% of the inventory in the same week last year. More importantly, inventory is dropping. That means that the ability for buyers to strike a bargain is dimishing. It all comes down to seller motivation - if they want to sell, they will. If they don't, a low offer won't fly. Some sellers are actually backing out of transactions. So, know what you want and buy it while you can.

I'm projecting a 1/4 point drop. Others are saying 1/2 point drop. Either way, it's a win for all buyers and owners with variable-rate mortgages.

This is a great local newsletter that costs only $20/year. Visit http://www.lannonline.org/ to see past issues and other relevant topics. They talk about individual neighborhoods, current issues in Los Altos, new construction, planning department applications, and other topics.

Check out L'Acquolina at the corner of Main and First Streets downtown. Opening soon, it features a refined and inviting atmosphere with northern Italian / southern French cuisine that's reasonably priced. Check it out!


Monday, October 22, 2007

Another busy weekend

I had two open houses this weekend. The first was a 1 bedroom condo in Mountain View priced at $349,000. I had four people through in the three hours it was open and only moderately serious buyers.

The second open house was a 3800 sq. ft. home in Los Altos Hills that was recently reduced to $1,998,000. I had almost 100 people through and several of those were seriously interested including one of my clients.

Here's what I heard from people consistently; when are they taking offers and will they take a lower price?

Here's what's interesting about that. Buyers have been conditioned in this area to enter competitive bidding situations - multiple offers. However, contrary to that, they are looking to offer less than the asking price. What the buyers are missing is that the sellers DON'T have to sell and many are unwilling to reduce their price.

Most homes are selling at or above asking price and only a few are being sold under. These homes are usually overpriced to begin with. The perception is that prices are dropping, when they aren't. A well priced home will sell quickly, no matter what the market conditions.

The key to keep in mind is that if you're buying a home and plan to stay, Los Altos, Los Altos Hills, and most nearby cities will continue to go up as they have in the past. This time of year is a particularly good time to buy but inventories are low compared to last year and good deals will get snapped up fast.