2010: Getting back into the game
Homebuyers move off the sidelines and re-enter the real estate market
People are starting to buy houses again.
Despite continuing gloom over "the economy," people are getting married, having babies, getting divorced, dying, downsizing — basically doing what they usually do. And those life passages send people looking for property, whether they're new parents or empty nesters.
With mortgage interest rates remaining low, more listings are coming onto the market, offering a broader range of choices. In Mountain View, for example, one could choose from 83 houses, ranging from $549,000 to $1.86 million (or 137 condos, from $198,000 to $965,000). Palo Alto's market was even broader: 122 houses were listed from $749,000 to $10.89 million.
Home sales in the first half of 2010 rose in every local community except East Palo Alto, according to the Silicon Valley Association of REALTORS* (See chart.). The greatest rebounding in both number of sales and price during the past two years happened in Mountain View and Palo Alto, with Atherton and Woodside not far behind.
Recent homebuyers shared their success stories — how they approached and overcame obstacles in the marketplace and ultimately purchased a home.
In 2008, Jamie and Brooke Turner were ready to buy a home. With a 1-year-old and two incomes, they were poised to give up their rented townhouse and find their dream home in Palo Alto.
But, like most people, they had a budget. They started looking in the $600,000 to $700,000 range, further spurred by low interest rates.
"We quickly realized that Palo Alto seemed to be fairly immune to price drops," Jamie Turner said.
Worried that the market would continue to slide — and they might overpay — the Turners put their home hunt on hold for a couple of years.
By now, they had a second child.
"We knew Palo Alto was ideal," said Brooke, who works as a partner relations representative for CK-12 Foundation, which creates free online textbooks for K-12.
"And we knew we'd get a lot less house," added Jamie, a software developer.
So they started working seriously with Nancy Goldcamp, a Coldwell Banker, Palo Alto, agent who'd been sending them e-mail market updates over the past two years. And they started haunting open houses in College Terrace and Barron Park, then Midtown and points south. They kept their eyes on websites, such as Zip Realty and Redfin, to catch houses just as they came on the market.
Soon they noticed what they called "the Palo Alto phenomenon" — A house would come on the market at $850,000 to $1 million, and an open house would be held over the weekend. Offers would be accepted mid-week, "and they'd be gone. Usually the price would be boosted by a hundred grand," Jamie said, "and the house would also need 50 grand of work."
After a couple of months, the Turners realized that even the low-end houses were either bid up over their price range or needed so much work that the end price was still too high.
"By that time, we knew we wanted a house, not a condo or a townhouse. We had our two kids; we were looking for this to be a long-term place where we would get settled, a little bit of a yard where our kids could run around," Brooke said.
Looking to Mountain View
So the Turners widened the net, looking in Menlo Park, Los Altos and Mountain View.
"Mountain View was always going to be one of the more realistic options, a couple of hundred thousand less than Palo Alto, right across the border," Jamie said.
They soon spotted a house in the Sylvan Park neighborhood. Although they both liked it right away, they were hesitant about the elementary school assignment. They'd done their research and knew that Bubb and Huff elementary schools were preferred. Their kids would be assigned to Landels.
Jamie acknowledged that his real concern was this was the first house they'd seen that they really liked in Mountain View. "We didn't want to be too hasty," he said.
But they kept going back to look at it. "It always stayed in our minds. By the time we decided to go back and make a bid on it, it had already dropped in price," Brooke added.
The house was first listed at $1.049 million, then it dropped to $1.029 million, then $999,000.
"That was the sign to us that it had been on the market for awhile, and we didn't feel like we had a lot of competition," Brooke said. So they bid $925,000, negotiated back and forth, and eventually they agreed on $960,000.
Now that they've settled in, the Turners have no regrets about choosing Mountain View, although they know they didn't get every last thing they wanted. Their home is on a busy corner, and the school isn't their first choice, but "it seems to be a good school. The parent community sounds good," Brooke said.
"We let go of Palo Alto, which in the end wasn't that big of a deal," Jamie said, pointing to their 2,100-square-foot house that was built in 1986. "It has a brand-new kitchen. It's in great shape."
Finding a mortgage
The Turners were pre-approved "for a lot more house than we could afford. They were too easy on us because they factored in our $2,900 rent, but we pay more for childcare. We look really good on paper," Jamie said.
Ultimately, they went to the bank of Mom and Dad, and are paying their mortgage directly to them.
The Turners have no second thoughts about their decision to buy a house in Mountain View.
"We have all these projects, but that's OK. Every weekend we chip away at it, but we'll be there for a long time. It's a very different feeling, knowing it's ours," Jamie said.
"I didn't expect to have that feeling. A couple of weeks after moving in, I felt like a huge weight was lifted from my shoulders," Brooke added.
Carol Blitzer is associate editor for the Voice's sister newspaper, the Palo Alto Weekly. She can be e-mailed at email@example.com.