Photograph by Dai Sugano

Many experts say the period between Halloween and the Super Bowl--in other words, right now--is when the serious buyers start house-hunting.

Each season has its reason, say the experts

By Sue DeRosier

Once upon a time sellers were advised to list their home on the market between March and June as buyers were most likely to make a move once their children were out of school. That adage still has merit but in the current environment there are other timing factors that industry analysts say both buyers and sellers should watch carefully.

"We advise our clients to buy when the opportunity is right regardless of the time of the year," said Larry Baldasano, president, Village Square Realty Inc. "Although prices might be a little higher in the spring, there are usually more homes to choose from which helps the buyer in the selection process. On the other hand, the home of the buyer's dreams could come on the market in late November and then that is the best time to buy."

The holiday period that is just around the corner usually brings a "softer" market for the real estate industry. According to Dian Hymer, author of Starting Out, The Complete Home Buyer's Guide, "this is the best time for a buyer to shop for a home. Prices tend to remain stable or in some cases may come down a little."

According to Hymer, buyers looking for a home between Halloween and the Super Bowl are usually more serious about their purchase. In fact, many buyers wait to shop for a home after the busy spring and summer rush when competition for homes is less. If children's schools are not a factor, the holiday season may provide buyers with a more comfortable transaction process as homes may be on the market a little longer and there are less offers on the table.

Hymer contends that even more important than the time of the year are the supply and demand forces affecting the local market. When buyer demand is high and the supply of homes for sale is low, the advantage goes to the seller--a direct parallel to the current Northern California market. Conversely, when inventory is high and demand is low, it is a buyer's market.

"Here in Silicon Valley we live in a 12-month a year market where seasonal affects rarely impact the prices and availability," adds Baldasano. "Until supply meets demand, all factors point to a continued seller's market for some time to come."

One factor, according to Baldasano, that has a more direct impact on the local market than the time of the year is the fluctuations in the Nasdaq stock market. He has seen sellers pull out of a transaction as their stocks lost value and their options were no longer a factor in the ability to buy a home.

"As Nasdaq goes, so goes our real estate market," said Baldasano. "During the first nine months of the year when the market was skyrocketing, we saw a good percentage of the purchases coming directly from stock option cash. Now that we are in a 'bear' market, buyers who at one time could put 30 percent to 40 percent down on a million dollar home are finding it harder to make that kind of a commitment."

Mike Sabes, broker, Referral Realty of Sunnyvale, confirms this trend as he has experienced customers leaving the market completely, in order to wait out the market declines. "The value of high-tech stocks definitely has an effect on the buying power in the Valley," said Sabes.

For buyers who have some time before they have to make a purchase of a new home, real estate investor, Robert M. Campbell, advises individuals to watch the trends in the real estate market similar to what a stock market investor will do. Campbell, a San Diego-based mortgage and real estate broker and publisher of the San Diego Real Estate Report, says there are five major indicators to watch in the real estate market, in addition to the Nasdaq and Dow Jones.

Interest rates, building permits, home sales, loan defaults and foreclosure sales all impact the real estate market. According to Campbell, when interest rates fall, the demand for housing goes up and vice versa. The number of building permits issued during a given time reflects the building industry's confidence in sales.

When permits increase, home sales are good, and when permits are down, sales are usually flat. Buyers' activity is a key factor in rising or decreasing prices. When there are a lot of homebuyers and demand is high, prices rise. Loan defaults and foreclosures point to a weaker economy as they signal people are having a hard time making ends meet.

"If interest rates drop a half- to one-percent, we could easily see a $600,000 median price home in Santa Clara Valley," adds Sabes. "The lower interest rates would drive more people into the market thereby adding to the demand and increasing prices."

With all the expert advice directed at the buyer's timing of the market, is there really a "bad" time for a seller to list a home? According to the National Association of Realtors (NAR) "Profile of Home Buyers and Sellers," yes there is. The report showed that 24 percent of sellers had to sell their homes quickly because they had already bought another home. Eleven percent said they were in a rush to sell because they either were moving or already had moved out of the area.

The report went on to say that a seller's urgency to move will diminish their ability to wait for the best offer thereby compromising their position. Sellers are advised to get their home ready for sale as soon as they know they will be making a move and to give themselves plenty of time to have the home on the market.

Local Realtors cite examples of sellers staying in the home, many times on a reduced rent-back basis, for weeks or even months while their next home is being built. This gives the seller more time to wait and not rush a transaction simply to get out from under the cost of the home.

"There is no doubt about the fact that sellers still hold most of the playing cards, but one thing sellers should be aware of is that we are seeing more and more buyers withdraw their offers if it means they will be in a bidding war," said Sabes. "Buyers who are tired of submitting offers only to be outbid are simply pulling their offers and waiting until they can find a home where they are the best and only offer on the table--regardless of the time of the year or the state of the market."

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