Photograph by Paul Myers

Barbara Stewart (left), a Saratoga Realtor, is working with Mark and Alice Spandler, who are buying their first home in San Jose.




Home buyers finding more for less

By Jean Newton

The door to the local real estate market has opened to many buyers who found it closed last year. As bidding wars drove home prices sky-high, the typical buyer came from the technology sector--riding atop the dot-com wave. Now the buyer profile has changed along with the market, allowing more people to grasp the American dream of owning their own home.

"Indeed the buyer profile has changed," said Mary Prochnow, owner of Mary Prochnow Realtors of Los Altos. "As an example, clients of mine who had recently been looking in Mountain View were thrilled that they could actually afford Los Altos. There are properties available this year under $1 million that last year would have been bid up by 'spec' builders, who are temporarily out of the market. This general circumstance holds true in other west valley neighborhoods as well."

On the other end of the price spectrum, Prochnow finds some buyers are cautious, wondering where the market will level out.

"I have a buyer for a large home having difficulty determining whether prices will continue to soften. In one instance a house came down in price by nearly $6 million before recently selling. This tends to make buyers wary. What will the price be in another moment?" said Prochnow, who believes it is a "great time to be a buyer in the moderate or low end of any of our markets."

Every other day new statistics appear regarding the status of the real estate market. Recent headlines have shown median home prices are up in some areas and down in others. Some reports say the top end of the market is slowing, while the entry-level market is increasing. Determining the status of the market is a job for the experts, said Silicon Valley Association of Realtors President Jeff Barnett of Alain Pinel Realtors in Los Gatos.

"Statistics can give you a general idea of what is happening in the market, but a professional real estate agent can translate those statistics into a more realistic picture of what is happening in your particular neighborhood. So it's important to work with a Realtor who has a good handle on the current market condition and who also knows your specific area," said Barnett.

For one newly married couple, it paid to keep in touch with their Realtor who continued to advise them about market conditions after they discovered they were priced out of the market last year and stopped looking.

Realtor Barbara Stewart of Century 21 Seville Contempo in Saratoga said the couple, who were engaged to be married and lived in a big house with several roommates, wanted their own home. Although they discovered they could only afford a condo or townhouse in their price range, the couple finally found one they liked and made an offer.

"They got into a bidding war with 20 other people and they ended up losing out, with the condo going for $100,000 more than they could offer," said Stewart. "The entire experience was too nerve-wracking. They just stopped looking and decided that after they got married, they would just move out of state because they couldn't afford to live here."

That was six months ago. Stewart kept in touch with the young couple and suggested they reevaluate the market after their July marriage so they could stay near their families. With Stewart's encouragement, the couple decided to look again. In just one evening they found three single-family homes in their price range and decided to put in an offer on one of them. Even though they ended up in a multi-offer situation, there were only two offers instead of 20, and they were the successful bidders, said Stewart.

"They were absolutely thrilled. Everything totally changed. Now they can stay in the area, keep their jobs and they are about to move into a three-bedroom, two-bath, home in a family-oriented neighborhood in Blossom Valley," Stewart said.

Saratoga Realtor Larry Barbella of Century 21 Seville Contempo also worked with a couple who planned to get married and was looking at homes last year.

"Everything was getting scooped up for more than the asking price. They started looking farther and farther away. They even looked in Gilroy, but couldn't find anything in their price range," said Barbella. "The whole environment has changed. Now there are many places to choose from, and this couple was able to buy a townhome in the price range they wanted in an area they liked."

Many people bailed out of the market last year because they didn't want to get into the bidding wars, said Barbella. Today, buyers feel more in control, and sellers are having a harder time understanding the market.

"Sellers know the market has changed, but they don't want to think that their home is included. Right now the first one out wins, so if sellers are realistic, they will realize buyers are no longer willing to pay a higher price. I am trying to educate my clients so they understand this market and know what price is realistic," Barbella said.

According to Barbella, sellers are starting to ask, "What's the bottom line?"

"Some are deciding to stay where they are. You have to draw a line in the sand and say, 'if I do this, can I accomplish my goals?' Some can't, and it changes the whole outlook."

Knowing when to buy or sell and determining the right price can be complicated. A real estate professional can provide the expertise to help make complex decisions in a complex market.

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