With better financing options now available, interest rates down and housing prices stabilizing, this could be an opportune time to buy in Pleasanton.
That's the word from Dave Stark, public affairs director for the Bay East Association of Realtors.
In a report to the Pleasanton Chamber of Commerce, Stark said Pleasanton is bucking the trend in other areas, including neighboring cities, with the median price for homes here ending 2007 at $830,000. That represented the third highest median valuation ever, Stark said, down from a record high of $850,000 in 2005 and $849,975 in 2006.
"Ten years ago, the median price for a single family house in Pleasanton was $290,000," Stark said. "We worked our way up to $500,000 in 2000, and then $831,000 last year."
"That's about a 187 percent increase in 10 years--a lot of money," he added. ""If you have seen that kind of return in your investment portfolio, I'd like to know about it."
In terms of sales volume, Pleasanton averaged about 1,100 resales of existing homes in each of the last 10 years, although the sale of only 628 homes last year was the lowest in that period. The hottest sales years were 1997 and 1998, when a total of 2,032 and 2,017 homes were sold, respectively. In southern Alameda County, sales of existing homes ended 2007 at 4,758, also a 10-year low.
Along with a slowdown in sales, Pleasanton has also seen a slowdown in new homes under construction. Coupled with the higher prices of homes here, the lack of new construction of cheaper tract homes also has kept mortgage foreclosures at a minimum. There were only three foreclosures among the 177 homes on the market in February compared to 134 foreclosures in Hayward, 41 in Livermore and 29 in Fremont. Dublin had four homes in foreclosure among 123 homes for sale in February.
"By reading or watching some of the media, you would think that the sky is falling, that the foreclosure crisis is a nationwide epidemic that's affecting every single real estate market," Stark said. "That's just not the case."
He said foreclosures are mainly happening in the speculative and entry-level markets, where home buyers were qualified without adequate background checks to buy in large tracts of new houses that needed to be sold.
Most of the foreclosures are in Florida and California, he explained, with much of the country affected very little.
"There are large areas in the northwest, south and southwest where we simply aren't seeing the high concentration of foreclosures," Stark said. "We're seeing them manly in the more affordable markets, such as Tracy and Stockton, where many first-time home buyers had to go to get into home ownership."
"It's some of those buyers who are in trouble right now," he added. "They didn't have adequate credit and they didn't have the income that allowed them to qualify for the mortgages they agreed to. Those markets that attracted buyers who had slightly shaky credit have been more impacted than, say, Pleasanton, where they never could have qualified for the larger loans they would need."
Stark shared historical data about notices of default and foreclosure rates. In California over the last 30 years there has typically been a 3 to 4 percent difference in the number of notices of default issued by lenders and loans that actually go into foreclosure. Since 1974 the delinquincy rate has been about 3.9 percent while the actual foreclosure rate is 0.81 percent.
"As for Pleasanton, I expect the market will pick up," Stark said. "The economy is still pretty good, unemployment is low and so are interest rates. People still want to buy in California and many want to buy in Pleasanton."
"Take a look at I-580 during any rush hour and you can just see many people who would like to live here, enjoy our excellent schools and great downtown," he added. "With better financing options and stimulus packages, I believe sales volume here will stabilize along with prices."