Pleasanton has nearly twice the number of homes on the resale market today as a year ago, but the good news is they are selling and the unsold inventory is starting to drop.
Realtor Roy Dronkers of Alain Pinel Realty told the Valley Marketing Association that prices are also holding, with median prices actually showing a $35,000 increase–from $840,000 to $875,000–year-to-date in August 2006, compared to the same period last year. The increase is more pronounced when compared to a median price year-to-date of $710,000 in August 2004.
“Some object to using the median price figure,” Dronkers said, “but in Pleasanton, where there are many homes priced well over $1 million, that’s the fairest way to show the market figures. If you just look at averages, you’re looking at $1,084,000 for a year-to-date average this year.”
Dronkers said media reports projecting a market crash or major downturn are “just plain inaccurate.”
“A problem we have is that we have more than 5,000 Realtors in the Bay East Association of Realtors that serves this area, and four-fifths of them–or roughly 4,000–have been in this profession for more than four years,” he explained. “That means that the vast majority of Realtors have never been through a market correction such as the one we are having now. They’ve only been selling during the extraordinarily good times. So the situation looks bad to many of them right now.”
Dronkers said the market was long overdue for a correction and the gradually increased interest rates cooled the market “just like they were intended to do.”
“The market was ready for a correction, corrections are necessary and corrections are health,” Dronkers said.
Another challenge facing Realtors who are used to ever-rising prices and multiple offers on a single house is overpricing. Their clients expect more than the neighbor just received for a house down the street–an expectation that was realistic just a year ago.
Today it’s not with sales prices actually accepted on offers coming in on average at 95.5 percent, compared to 98.5 percent just a year ago.
“That means someone who wants to sell their $900,000 home must be willing to drop 4 1/2 percent to move it quickly,” Dronkers said. “Buyers already know that, and sellers must accept it.”
Dronkers said there are four major blunders sellers are making today:
* They listen to their neighbors, or former neighbors about what they should get for their home;
* They don’t listen to their Realtors, turning instead to the Internet or other so-called real estate experts for pricing advice.
* They aren’t taking care of their home’s landscaping, which can give it a competitive edge if well maintained.
* They try to sell a dirty house, not bothering to make improvements that buyers today expect to find–and can find–in similarly-priced houses on the market.
“I showed two homes last week right around the corner from each other,” Dronkers said. “One had a well-manicured yard and it looked great. The other looked as if it had been in Desert Storm. It was awful. Guess which one will sell first?”
Dronkers said there were 256 homes on the resale market in Pleasanton at the end of August, compared to 136 at the same time last year–an 88 percent increase. Also, 121 homes sold between July 1 and Aug. 31, compared to 162 in the same period last year–a drop of 25 percent. The average days on the market in Pleasanton in this same period was 56, compared to 21 a year ago.
“Some see this as bad, but I don’t,” Dronkers said. The California Association of Realtors reports that a buyers’ market starts when homes are on the market for 180 days, so 56 aren’t that much of a problem.”
With the stock market expected to do well in the fourth quarter of 2006 and interest rates to drop, Dronkers projects the rest of the year will allow buyers to work off some of the inventory.
“This is the fastest growing job market in California and the Bay Area also is the gateway for the emerging Pacific Rim Market,” Dronkers said. “Prospective buyers like this area, and they especially like Pleasanton. I see the market steadily gaining speed.”
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