Pleasanton Weekly

- March 27, 2009

If you're thinking about buying, do it now

Real estate veteran says lower prices, low interest rates make this opportune time for Pleasanton, Tri-Valley home buyers

by Jeb Bing

With all the angst over real estate these days, prospective buyers might think it's wise to wait a while before "moving up" to a bigger house or even making that first-time leap into home ownership. They're wrong.

That's the message from Janet Cristiano, the broker/managing partner at Prudential California Realty.

Sure, she's a Realtor and she's saying what real estate agents are supposed to say to promote sales and improve their business which, as everyone knows, has not been very robust lately.

But Cristiano may have a point. Fixed, 30-year interest rates are in the 4-and-5 percentage point brackets, historic lows for this century and certainly since the 18-19-percent ranges in the early 1980s.

Home prices are also low, with existing homes now selling at 1999 prices in much of the Tri-Valley and far less in the foreclosure-hot communities of Brentwood, Antioch, Mountain House and even in parts of Livermore.

Experts say the stars are aligned in favor of buyers with good credit, especially for first-time buyers who can take advantage of recent stimulus packages that can make their purchase even less expensive, but also for those who want to sell their house in Pleasanton and move up into more spacious quarters.

Interest rates are not likely to stay this low for long and home prices appear to be bottoming out. In Pleasanton, there is a variety of homes ranging from seven room estate homes in Ruby Hill that sell for $3 million and more to town homes for much less.

Although Pleasanton hasn't escaped the downturn in sales and downward trend in prices, the market here is better than in many neighboring communities and in far better shape than the state as a whole. Conditions also seem to be getting better, with more sales so far in the first quarter of 2009 than at the same time a year ago.

"So the buyer's confidence is building again and, of course, affordability has gotten better as prices have gone down," Cristiano explained.

It's the lack of confidence that interest rates have dropped about as far as they will and that home prices have nearly bottomed out that has kept most buyers out of the market. There's also been difficulty in finding mortgage lenders willing to make loan commitments.

Today, conforming loans (the most common and easiest to arrange financing) include mortgages below $729,000, much better funding is available to a large group of buyers.

Most of the higher mortgages are for homes in Ruby Hill, Castlewood and other high-end Pleasanton neighborhoods where prices range from $2 million to $4 million and even higher. For those homes, it's not uncommon for buyers to seek jumbo mortgages well above the $729,000 mark. With good equity, say from selling an existing home in the $1 million range, and good credit, more jumbo mortgages are being written. But it's even more important for buyers seeking those types of mortgages to be "squeaky clean" in their credit rating.

As good as the timing is for prospective home buyers today, it's even better for first-time home buyers or anyone who has not owned a home in the last four years. These buyers are now eligible for a federal tax credit of up to $8,000, a benefit recently put into place to encourage buyers to purchase right now. It's not a deduction or loan to be re-paid, but a credit against taxes owed in the current year. Special benefits also include smaller down payments with fixed-rate, 30-year loans available through the FHA with as little as 3 percent down for qualified buyers on conforming loans.

"I've seen quite a few up-and-down real estate marketing cycles in my years as a Realtor in Pleasanton," Cristiano said. "This has been the most difficult but we're starting to work our way out of it."


Posted by Homeowner, a resident of Another Pleasanton neighborhood
on Mar 27, 2009 at 6:35 am

If you're thinking about buying, do it now

Self-serving Real estate veteran says anything to mislead you into believing this is opportune time for Pleasanton, Tri-Valley home buyers.

Until Pleasanton sellers start pricing their houses at 1999 prices, do not even think about buying.

How many Pleasanton home sales are listed in this week's PW - exactly zero!

"Starting to work our way out of it?" Please.

Posted by Res, a resident of Donlon Elementary School
on Mar 27, 2009 at 12:26 pm

Its still got a ways to go, just wait the foreclosure rates are only increasing as people lose their jobs and can't make payments on their houses they bought in the over inflated market with "creative" loans.

If I buy a house it probably won't be in Pleasanton, despite having lived here most my life, I just can't see the value when a house in a good area of another city costs the same as a small townhome here.

Posted by -r-, a resident of Mariposa Ranch
on Mar 28, 2009 at 8:14 am

The recession will likely end this year, and unemployment will likely continue to increase for a while. Local home prices might go either way, but you'll very likely not see mortgage rates like these next year, and five years from now lots of folks will likely regret not taking advantage of these. Did everyone here sleep through the Carter presidency?
Why buy a smaller home or condo in a nicer town, rather than a big box in the central valley? Two answers: schools and community. If you can buy a house for 200K less somewhere else, but end up sending 2.3 kids to private school for 12 years, you'll end up spending over 400K in tuition.
Buy local stuff and support local merchants. Buy stuff made in the US, so folks get to keep their jobs, and who knows, maybe your kids, nieces and nephews will have jobs when they grow up. If you really try, you can even buy tennis shoes made in the US. Save a little every month and invest it. You can do your part in turning this around.

Posted by do it now..., a resident of Another Pleasanton neighborhood
on Mar 31, 2009 at 8:44 pm

...and then watch your home value plunge another 30% in the next year...

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