Frenzied sales market continues Frenzied sales market continues (October 01, 2004)

'It's going nuts,' says Realtor

Despite continued rising interest rates and uncertainties over the coming presidential election, home buyers continued their frenetic pace in Pleasanton this week with multiple offers for houses priced at $1 million and higher.

"It's going nuts," said Dave Cunningham of Keller Williams Realty. "Even though there are fewer buyers at the higher end, they're out there and their offers are solid."

Cunningham, who specializes in homes priced at $1 million and over, said buyers in that price range also aren't concerned with slight changes in interest rates.

"For most people, when you get into the $2 million price range, whether it's 5-3/4 or 6 or 6-1/4 doesn't make a difference," he explained. "But if rates start getting into the 8-1/2 or 9 percent range, then that would be trouble."

But Fred Hempy, a partner in Valley Brokers, is less boisterous.

"Rising interest rates are going to jeopardize the market by eliminating a good portion of the first-time home buyers who drive this market," Hempy said. "We're already starting to see some softness at the high end, and I wouldn't be surprised if in the next month or two that we don't see these interest rates affecting homes in the $800,000 price range."

"I don't see anyone losing money on their house, but I think the appreciation is leveling off and going flat really quick," he added.

Blaise Lofland, a Realtor with Alain Pinel Realtors, agreed, although he said the housing market generally starts slowing down as Thanksgiving and the Christmas holidays near.

"I think we will see a repeat of last year where September and October were strong, but then the holiday slowdown starts," he said. "Still, I am cautiously optimistic that we will have a very decent fourth quarter in Pleasanton."

Realtors said that although there's some nervousness among their clients in advance of the November election, that's balanced by those more bullish who believe this may be their chance of a lifetime to buy in Pleasanton.

"These are the younger buyers who like Pleasanton and think this community is awesome," Lofland said. "They see the rates still at historic lows, their buying power has never been better, so they're coming here to buy those homes and to live in this very special city."

All agree that the "24/7 hours" Realtors have been working during the recent "red hot market" may subside in mid-November, but most believe the market will resume its pace in early 2005.

"You have to remember that unlike the East Coast where home sales are weather driven, we can expect spring sales to start again by the third week in January and continue strong through early June," Cunningham said.

"Plus, we do a lot of relocation business and that never stops," he added. "What amazes me is the number of relocations we're seeing in this area. You would think with 350,000 jobs or so lost in the country that no company would even think about relocating someone. But they are and we're handling relocation business all the time, including during the holidays."

Realtors said that multiple offers are continuing for homes in the $1 million and under category, with offers being made above the asking price for those in the $800,000 price range. For homes over $1 million, most buyers and sellers negotiate for the best deal.

Hempy said he is noticing more savvy buyers in the marketplace, those who have been watching and waiting for a slowdown before making their offers. For the most part, he added, Pleasanton is a move-up where buyers generally own a home already and have the equity and patience to wait for favorable prices.

"These are not first-time home buyers, but more likely people who have done this before and are market savvy," he said.

Hempy, who has 22 years of real estate experience, had worked with a number of local firms before teaming up with his brother Rick Hempy to open Valley Brokers. He predicted that when new homes being offered by Greenbriar and Ponderosa are sold, prices of existing homes will rise faster and higher.

Lofland, who has been in real estate in Pleasanton since 1986, said the current inventory of 130 to 150 homes on the market at any one time has remained steady, adding pressure for buyers to make their offers quickly.

"It's still a steady sellers market and I expect that to continue," he said.

Cunningham, a 22-year veteran in the real estate business, opened his own firm seven years ago and relocated to Main Street in 2002. With his wife Fran as a partner, the two operate their own personal real estate firm within the umbrella of Keller Williams, taking advantage of its national marketing reach while still offering personalized service as a small firm.

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