Saratoga News

Homes

Median prices of area homes reach seven figures

It's $1 million in LG and $1.4 million in Saratoga

By Rose Meily

The median price of a Los Gatos home in April 2006 was $1 million, up 1.3 percent from the same period a year ago. In Saratoga, the median home price was $1,407,500, down 9.8 percent from a year ago. Saratoga, however, still ranked among the top cities statewide with the highest median home price during April 2006, according to a recent report by the California Association of Realtors.

David Tonna, a Realtor with Windermere Silicon Valley Prop in Los Gatos, said homes in both Los Gatos and Saratoga have historically been able to command good prices because of their size, location and good school systems. "Both Los Gatos and Saratoga have great schools, and both have populations that are small enough that they still have the small-town flair, which gives a very good sense of community. They also have a great geographic location. They have great downtowns and restaurants."

Brian Bernasconi, a Realtor with Alain Pinel Realtors in Los Gatos, added that Los Gatos and Saratoga have the assets of pleasant weather and architectural diversity.

Statewide, the median price of an existing single-family detached home during April 2006 was $562,380, a 10.2 percent increase over the revised $510,400 median for April 2005. The April 2006 median price was essentially unchanged compared with March's revised $562,630 median price.

"Sales fell this year compared with April 2005, when they hit the second-highest monthly pace on record. Concerns about the likelihood of future interest rate increases continue to influence the market," said Vince Malta, California Association of Realtors president. "While still near their historic lows, mortgage interest rates are at their highest level since June 2002 for fixed-rate mortgages, and August 2001 for adjustable-rate mortgages."

Statewide home resale activity decreased 21.4 percent from the 658,060 sales pace recorded in April 2005.

The statewide sales figure represents what the total number of homes sold during 2006 would be if sales maintain the April pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

"At 10.2 percent in April, we're seeing price appreciation trend toward a more sustainable rate for the California housing market," said California Association of Realtors vice president and chief economist Leslie Appleton-Young. "Increased inventory levels are moderating the rate of price appreciation, but are still below what we experience in a more traditional market when the long-term supply of unsold inventory is about seven months."

Although these are some indications that the market is softening, real estate officials report market stress indicators are still very low. According to DataQuick, a real estate information service based in Vancouver, down payments are stable, speculation buying is moderate, there are no significant shifts in market mix and default rates are rising, but still low. Earlier increases in non owner-occupied purchase activity and flipping activity have leveled off. The use of adjustable-rate mortgages has dropped the last four months.

DataQuick's figures show the median price paid for a California home last month was $468,000. That was down 0.4 percent from the revised $470,000 for March, a record, and up 10.4 percent from $424,000 for April a year ago.

The typical mortgage payment home buyers committed themselves to paying last month was $2,271. That was up from $2,235 in March, and up from $1,924 for April a year ago.

Both Bernasconi and Tonna believe the market is moving away from "the fast and furious" and becoming more balanced. History has shown real estate in both communities, they said, will hold its own.

"There is a correction happening in the market, but in no way, shape or form is there a bubble," Bernasconi said. "The last three years have seen a most unbelievably strong residential market in the history of the region. Now we have something that resembles a more normal market, and people are saying the sky is falling. In fact, we have a very healthy amount of inventory and still great rates. Over 50 percent of all homes sold in the county have received multiple offers. That's one of two homes sold; it wouldn't suggest to me that there's a dip in the housing sector. It's moving very strongly."

Both Tonna and Bernasconi, members of the Silicon Valley Association of Realtors board of directors, called it a great time for both buyers and sellers.

Tonna said, "With inventory up slightly, buyers now have a greater selection of homes to choose from. Homes that are in good condition and priced right tend to still get multiple offers. Sellers who tend to overprice homes and feel their home is worth more than it is, tend to slow down the market."

Bernasconi added, "My advice to sellers is, 'Just don't be greedy. Price your home right, be very honest with yourself about what the price is, what the market is going to pay for your home, and you'll be all right.' "

Other cities and communities with the highest median home prices in California during April 2006 were: Manhattan Beach, $1,685,000; Burlingame, $1,600,000; Los Altos, $1,557,500; Newport Beach, $1,445,000; Santa Barbara, $1,250,000; Lafayette, $1,112,500; Mill Valley, $1,068,750; Santa Monica, $1,020,000; and Danville, $1,019,500.