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Uploaded: Wednesday, March 26, 2008, 2:39 PM
Pleasanton bucking trend in housing crisis
Bay East tallies 10-year investment earnings at 187%
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 | 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." - Jeb Bing Are you receiving Express, our free daily e-mail edition? See a sample and sign-up for Express.
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Posted by Homeowner, a resident of the Ironwood neighborhood, on Mar 27, 2008 at 8:28 am Well there are too many inaccurate conclusions in this story to know where to begin. Just the Pleasanton Weekly doing its best to help the realtors prop up the housing bubble.
I think this story helps put the situation into perspective -
Web Link?
I wonder if tomorrow's real estate article in the PW will use the misleading "sales increase 2.9% in Feb" or the more accurate "sales down 23.8% compared to Feb 07" - what do you think?
It is irresponsible to cheerlead people into buying in this market.
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Posted by Homeowner Too, a resident of the Another Pleasanton neighborhood neighborhood, on Mar 27, 2008 at 3:52 pm It is also worth noting that while sales may be improving, the prices have dropped dramatically. That having been said, a 2.9% increase is really not a thing to be shouting from the rooftops.
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Posted by Homeowner - D.I., a resident of the Ironwood neighborhood, on Mar 28, 2008 at 10:53 am You guys are funny. All the article is saying, hey, around here, it is not that bad. It is not even just Pleasanton Weekly, just the other day there was a news story that mentioned San Ramon and Danville as well. It all comes down to three things; location, location, location. That simple; of course we will have a slow down, of course in a slow down the home prices will drop, but what we experienced here with such a small drop, you can not compare to other towns. Anyhow, Pleasanton is great place to buy, and anyone holding back to buy for even less; I wish them luck, you can never time the market, if the price is good, you buy, you wait to drop, and price will jump higher. "Irresponsible to chearlead", that is a funny comment. As for the comment, down from previous year compared to previous month; remember, we are priced at "today" so increase over month is good, who cares where we were a year ago and compare how much lower things are?? So things will not be better until we match previous growth? Makes no sense to me, as obviously we are in a new market; tougher to get loans now (should be) so of course growth rate will be less; so it all comes down to compare with recent growth, not from a year or two ago. Anyhow, have to go for now....
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Posted by Homeowner, a resident of the Ironwood neighborhood, on Mar 28, 2008 at 12:32 pm Hi Homeowner - DI,
I do understand your point about the original article saying its not that bad around here. My main point is that no matter if market conditions are good, bad, or indifferent, the realtors will say its a good time to buy (or sell). They spin the news, the market, and the economy to fit their agenda - hey, its capitalism at its best and they should do whatever they can to make a buck. However, in my opinion, we as consumers should take what they say with a grain of salt. I think the article I linked to did a good job of dissecting some of the recent news and how it was spun.
You state that "if the price is good, you buy, you wait to drop, and price will jump higher." In my opinion, in this market with the current economic backdrop and credit conditions, this is absolutely wrong. If anything, in the very best case, prices will stay flat. All of the fuel that fed the housing bubble has been taken away, from liar loans and lack lending standards to credit availability and desire to buy these loans on the open market. Again in my opinion, prices will be dropping further.
Actually, comparing February 08 to Feb 07 is very relevant. It shows a dramatic drop in demand in an apples to apples comparison. Seasonal patterns in home buying should drive an increase from Jan 08 to Feb 08 and a measly 2.9% increase doesn't mean anything more than a dreary January in home sales was followed by a nearly as dreary February just when interest should be picking up.
Anyway, believe who you want to believe. My point is that the realtors are running a business and they spin the facts to improve their business, and in some cases, twisting the facts well beyond reality.
I could pick apart the spinning from the original article in the PW (why using median prices to get a return of 187% is inaccurate, his own data shows the price drops are accelerating, changes in foreclosure rates recently he doesn't mention, and the economy is good(!)), but like you, I gotta go for now..
One last item - if things are so good, why are there 2 home sales listed in this weeks PW? Why does Ponderosa have a sign spinner on the corner and willing to bargain now on prices?
You talk about the market like we are at the bottom. I don't agree, but time will tell.
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Posted by Homeowner, a resident of the Castlewood Heights neighborhood, on Apr 4, 2008 at 11:17 am I'd also point out that the comparison of the median price of $500k in 2000 and $830k in 2008 should be qualified. One must consider the increase of multi-million dollar homes being built in Pleasanton, which significantly affect the median price of a home in the area. It is safe to say that if your home was only worth $290k ten years ago, it's probably not worth $830k today, so inferring that those homeowners all realized a "187 percent increase in 10 years" is decidedly misleading.
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Posted by Homeowner, a resident of the Ironwood neighborhood, on Apr 4, 2008 at 11:23 am It took a week after my first post above, but the Pleasanton Weekly decided to print the biased spinning of the national association of realtors, instead of a more balanced story.
Most real economists roll their eyes at the realtor spinning. I guess we should take this section of the PW as an advertising section. I think they should publish that at the top of these articles.
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Posted by Homeowner - D.I., a resident of the Ironwood neighborhood, on Apr 4, 2008 at 3:27 pm lol You are too funny; I come back here to read more of your posts; so tell me, what happened with your real estate agent? You must have a good story to tell.
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Posted by Homeowner, a resident of the Ironwood neighborhood, on Apr 5, 2008 at 10:50 am If shining a light on the misrepresentations of realtors (primarily the NAR) is funny to you, that's great. Sometimes the truth is funny!
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Posted by Homeowner - D.I., a resident of the Ironwood neighborhood, on Apr 7, 2008 at 4:35 pm Well...realtors are salesmen...I think it is the nature of all salesmen to have some spin or representation of facts that suit their needs. I tell everyone, statistics on the news are always misleading. For example, one year, don't remember the exact detail...but it came down to this...News was all over how one stretch of a highway had the most deadliest year ever; said 5 people died; funny, the total number of accidents dropped in that stretch; and all the deaths occured from one head on accident. So now; is the highway improving or getting worse? less accidents vs more deaths from one bad one...how you want to spin this; what will sell more ad time... anyhow...right now, I am laughing every time I hear "Mortgage Meltdown"... I laugh not at people who lost their homes; I laugh because it is not that bad; just as I laugh when people are saying release some of the oil reserves because gas prices are high??!! say what? because gas is more expensive you want to use emergency reserves??? save it to when opec decides to produce nothing; or we get nothing from mexico and south america...it is not an emergency as the mortgage crisis is not an emergency...people made bad choices, got loans they shouldn't, and now they need to pay for it...why should I, the tax payer, bail out these fools? hey, how about the compensation of these morgtage companies, 19mil i think to the country wide ceo, "performance bonus"; that is funny, 19mil performance for taking a company to bankruptcy, nice... i want that job, i'll do it for 500k.
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