Los Gatos Weekly-Times

Homes

Existing-home sales rise nationwide in November

By Rose Meily

The new year can spell good news for both buyers and sellers as the real estate market continues to show signs of stabilizing. Prices are becoming moderate, interest rates remain subdued and sales are edging upward, suggesting a turn in the market.

The National Association of Realtors reports existing-home sales nationwide continued to recover in November, following a rise in October. Total existing-home sales--including single-family, townhomes, condominiums and co-ops--rose 0.6 percent to a seasonally adjusted annual rate of 6.28 million units in November from a level of 6.24 million in October, but were 10.7 percent below the 7.03 million-unit pace in November 2005.

David Lereah, NAR's chief economist, said modest gains are expected for home sales. "As the housing market recovers from its correction, existing-home sales should be rising gradually during 2007. It looks like we may have reached the low point for the current cycle in September," Lereah said.

The national median existing-home price for all housing types was $218,000 in November, which is 3.1 percent lower than November 2005, when the median price was $225,000.

"For every 1 percent drop in home prices, we project an additional 50,000 buyers are drawn into the market," Lereah said.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.24 percent in November, down from 6.36 percent in October. The rate was 6.33 percent in November 2005.

National Association of Realtors President Pat Vredevoogd Combs said the performance of long-term interest rates is a pleasant surprise. "Mortgage interest rates are the lowest they've been since January, and it's the first time since August of 2005 that interest rates are lower than a year earlier," said Combs. "This is increasing buying power at the same time that sellers are showing a willingness to negotiate price and terms. Combined with a plentiful supply of homes on the market, there's a window for buyers now with conditions that we haven't seen prior to the beginning of the housing boom in 2001."

With prices stabilizing and low mortgage interest rates, 2007 president of the Silicon Valley Association of Realtors Mark Burns' advice to serious homebuyers is to buy now.

"Buy now, not only because it's a good investment, but buy for family and the community. The Silicon Valley area has done very well in the last 50-plus years and will continue to do so," said Burns, who is a native of Saratoga and a Realtor with Coldwell Banker in Cupertino.

According to the California Association of Realtors, the median home price for all types of home sales--new and existing, condos and single-family--in Santa Clara County in November 2006 was $680,000, up 1.5 percent from $670,000 in November 2005. Los Altos, Los Gatos, Cupertino were among the 10 cities and communities with the highest median home prices in the state during November 2006. The November median home price in Los Altos was $1,507,500; Los Gatos, $1,137,500; and Cupertino, $910,500.

RE/MAX Realtor Carolyn Miller said she is not surprised Cupertino was one of the cities with the highest median home price in November 2006. "Homes in Cupertino have always held their value due to the school system," explained Miller. "Even in the worst of markets, the values of homes here have not suffered like homes in other areas in the state."

Miller, who has been a Realtor for 26 years, said she welcomes the transition to normal market conditions.

"Markets are cyclical. I love the normal market because it gives everybody a chance to walk away happy," said Miller. "This kind of market allows consideration and evaluation time for buyers, and sellers don't feel overwhelmed with demand. Buyers have a chance to know the product--which is the house--better. They can better position themselves for an offer, and sellers can be better positioned for appropriate pricing. Agents, in turn, can actually have time to market the house to realize the best price for the seller."