"I think the summer market is excellent," said Brian Kessler of Intero Real Estate Services in Los Gatos. "We are still seeing multiple offers, active open houses and numerous hits on our virtual-tour website."

Kessler points to the interest rate as a key element. "With interest rates creeping up, many buyers feel they have missed the bottom of the market and are acting quickly to purchase a home before rates go up any higher."

Thirty-year fixed mortgage interest rates averaged 5.83 percent during April 2004, up from 5.81 percent in April 2003, according to Freddie Mac. Adjustable mortgage interest rates averaged 3.65 percent in April 2004 compared to 3.80 percent in April 2003.

National Association of Realtors President Walt McDonald, broker/owner of Walt McDonald Real Estate in Riverside, Calif., said interest rates remain historically low. "It appears that we've already experienced most of the anticipated rise in mortgage interest rates, and they'll probably increase only modestly in the second half of the year," he said. "Although the pace of home sales should be slower in the second half, total sales in 2004 will be close to last year's record. Americans still see housing as a good investment."

Sales of existing single-family homes rose for the third consecutive month and were at the second-highest pace on record, according to the National Association of Realtors.

David Lereah, the association's chief economist, said a strong month was expected. "Given the favorable economic backdrop and strong sales momentum, a big number was expected for April home sales, and it's likely we'll see another big month in May," he said. "Part of what we're seeing now is 'fence-jumping' from people wanting to buy a home before interest rates move higher. Even with an additional rise in recent weeks, the good news is that mortgage interest rates now appear to be leveling out in the 6.3 percent range."

In California, sales increased 9.8 percent compared to the same period a year ago, while median prices of existing homes increased by 24.6 percent in April, reported the California Association of Realtors.

"While demand for homes shows no signs of abating, California is simply not adding sufficient housing stock to the supply of homes for sale to meet this need," said Leslie Appleton-Young, the association's vice president and chief economist. "This is a serious issue that California Realtors are addressing through a number of initiatives in Sacramento and on the housing-affordability front."

The median price of an existing, single-family detached home in California during April 2004 was $453,590, a 24.6 percent increase over the revised $364,040 median for April 2003, the association reported. The national median existing-home price was $176,000 in April, up 7.3 percent from April 2003 when the median price was $164,100. The median is a typical market price where half of the homes sold for more and half sold for less.

"The median price of a home surged to another record in April as the traditional spring home-buying season got under way," said California Association of Realtors President Ann Pettijohn. "Buyers concerned about potential interest-rate increases later this year jumped into the market, while the supply of homes for sale continued to shrink."

Saratoga made the top 10 again in the statewide list of the 10 cities and communities with the highest median home prices in California during April 2004. The cities on the top 10 list are Malibu, $1,547,500; Beverly Hills, $1,420,000; Los Altos, $1,350,000; Laguna Beach, $1,314,500; Manhattan Beach, $1,265,000; Saratoga, $1,236,000; Calabasas, $1,160,000; Burlingame, $1,100,000; Palos Verdes Estates, $1,012,500; and Newport Beach, $990,000.

Dennis Byron, chairman of the Los Gatos­Saratoga District of Silicon Valley Association of Realtors, thinks the summer market will be one of the strongest in years.

"We do have more inventory coming on, so the multiple offers will slow down, but the buyers will be out in force. Consumer confidence is up. I don't see interest rates jumping. The economy is getting stronger. This all makes for a good, solid market," he said.

Byron is also seeing a resurgence in the relocation business, and he believes this is a positive sign that companies are hiring again.

"In the last week I have received six relocation referrals for people considering new jobs in the area. I have already placed one person into a home in Los Gatos, and two others have rented apartments and will be actively looking to purchase homes once their families move out here."

As consumer confidence increases, it will counterbalance hesitation on long-term investments, said Realtor Judy Jarvis Ellis of Alain Pinel Realtors and immediate past president of Silicon Valley Association of Realtors.

"For summer 2004, the market has reached its price point resistance. Properties of sellers slow to grasp this will stay on the market longer, resulting in more choices for buyers and a more balanced determination of fair market value," said Ellis.

Determining the best time to buy or sell can be difficult without the help of a qualified professional. For a list of knowledgeable Realtors, visit the Silicon Valley Association of Realtors website at www.silvar.org.