Prices soar to record highs in hot, tight Pleasanton re-sale market Prices soar to record highs in hot, tight Pleasanton re-sale market (March 18, 2005)

Many sellers now wait for multiple offers so 'no money is left on the table'
by Jeb Bing

Sales of high-priced homes in Pleasanton are booming despite higher short-term interest rates that haven't yet affected the local housing market.

As of mid-March, there were only 61 single family homes on the re-sale market, with 24 priced below $1 million and the rest priced up to $4.2-million, according to the Bay East Association of Realtors. No house in Pleasanton was priced below $650,000, although 10 condominiums and small townhouses were listed for sale at prices ranging from $375,000 to $450,000.

The top-priced home listed by Realtors was a 7,886-square-foot, five-bedroom home at 1354 Galanti Place in Ruby Hill for $4,260,000. The lowest was a $650,000, three bedroom home at 4023 Page Ct.

"I haven't seen this inventory of single family homes so low since 2000," said Tom Ivarson, a Realtor with Coldwell Banker's office at Hopyard Road and Stoneridge Drive. "It's a matter of supply and demand and obviously demand here is still outpacing supply."

"Not long ago, the cheapest house in Pleasanton went for $300,000 and the most expensive was $2 million," he added. "As a result, the real active market right now has shifted from about $1 million to $2 million. With many more buyers than sellers, a house that is priced right, even if it's expensive, will move quickly."

Ivarson said that 1,299 homes were sold in Pleasanton last year, with 968 of them single family homes.

"That was a pretty active year, a little above average," he said. "We're on target for continuing at that rate in 2005 if mortgage interest rates don't rise significantly. Still, it's only the third month of the year, so exact projections are hard to make."

To make sure they see the top offers, sellers, working with their agents, are bundling proposals into a single time frame, agreeing to open all the bids for their home at a pre-agreed time, generally at 4 p.m. on a Tuesday or Wednesday.

"In earlier days, it was not at all uncommon to present offers directly to the seller and have a chance to tell them about your client who wanted to buy their house," Ivarson said. "With multiple offers on the same piece of property and everything moving very quickly, that's changed."

Mike Carey, a broker and co-owner with his wife Theresa of Investment Real Estate Company at 327 St. Mary St. in downtown Pleasanton, agreed

"We're talking fast-action here," he said. "We're finding that 90 percent of the listings are following this format: listing during the week, conducting a brokers' tour on Friday, a public open house on Sunday, and then reviewing offers on Wednesday. It can move that fast with multiple offers to be considered at that time.

"It doesn't matter if you want to buy the house as soon as you see it on Saturday or Sunday, it's pretty standard now that you submit your offer for consideration along with the others at the same time," he added. "No seller wants to leave any money on the table."

Both Carey and Ivarson expect the inventory of Pleasanton homes on the re-sale market to increase as the school year nears an end, since that's when many homeowners want to move. But with the number of buyers also increasing at that time, it could make for an even more hectic market.

"The early-birds want to buy fairly soon so that they're in their new Pleasanton home by July, when it's time to register the kids for school," Carey said. "Pleasanton schools are no longer allowing you to register your students without actually having the new local address listed in your name."

Despite the Federal Reserve's series of boosts in short-term interest rates, mortgage rates have stayed surprisingly low and, in some cases, even dropped. Mortgage lenders are touting loans with rock-bottom introductory rates, allowing those with modest incomes to obtain financing on more expensive homes.

Lori Smith of NorthPoint Real Estate Investment Services in Pleasanton, said she has been able to offer 100 percent financing or as little as 5 to 10 percent down on higher-priced homes to those with good credit ratings. With adjustable loans increasing slightly, fixed rate loans covering 15 or 30 years are regaining popularity. Some loans, called option adjustable-rate mortgages, can carry an initial rate as low as 1 percent, although those rates typically jump to 4 percent after as little as three months.

At Washington Mutual, short-term ARMS accounted for $19 billion nationally, or 40 percent of the company's mortgage originations in the fourth quarter of 2004, up 24 percent from a year earlier.

Smith said that anyone even thinking about buying a new home should see a mortgage broker like her first, although they might take a quick look at the costs of the homes they are considering. Then Smith can quickly check the three credit bureaus - TransUnion, Equifax and Experian - to determine how credit worthy the prospective buyer is.

"Any credit rating score above 700 is good, but it's important to check all three bureaus, since one may have something negative in your file that needs to be corrected before you can qualify for the best interest terms," she said.

Once qualified, say for a home that is priced at $750,000, Smith can shop for financing and give the buyer a letter to give to the Realtor confirming the financing capability.

"With the seller receiving multiple offers, you want to make sure yours is ready to go," Smith said.

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