The 'Right' Time to Buy in Los Altos and Los Altos Hills?

The other day, I had a conversation with a client on how to strategically buy a home in Los Altos. She has been thinking of getting into the Los Altos market for a few years now but always thought the price was not right until now. This, along with the historic low mortgage rates, convinced her that it’s the right time.

And she is absolutely right.

If you have contemplated buying a home in Los Altos or Los Altos Hills, now is the time. With the local housing market gradually bouncing back from the recent correction, it is one of the best times in recent memory to get into the desirable Los Altos/Los Altos Hills market. And you certainly don’t want to wait till it’s too late.

Los Altos/Los Altos Hills is one of the most sought-after areas in Silicon Valley. Many of us who managed to buy a home here in recent years have stories to share about how competitive the market used to be before the slowdown. Now, with the market on the way to recovery, the timing is great for serious buyers.

And here is why.

Compared to many neighborhoods in the vicinity, Los Altos and Los Altos Hills are expensive. With the appeal of good schools, low crime rates and beautiful neighborhoods, buyers have always been willing to pay top dollar in order to call Los Altos or Los Altos Hills home. In February, the median home prices were $1.63 million in Los Altos and $2.2 million in Los Alts Hills. By comparison, the median prices were $1.86 million and $2.5 million, respectively, three years ago, in February 2008. While homes remain pricey, Los Altos and Los Altos Hills have certainly become more “affordable” now than before.

People may feel too nervous to buy when the market is on a downward trend. With the local market having stabilized since last year, it appears that the worst is behind us. In the past few weeks, I’ve seen more buyers, who had put their plan on hold during the holidays, return to the market.

Recent home sales statistics (see my other column, ) also suggest that demand for housing has been going up, as shown by the fact that buyers paid closer to list price than before. Obviously, a stronger demand for housing will soon translate into higher home prices. Now would be a good time to return to the market before the prices go straight up again.

If you plan to take out a mortgage when buying a home, you will be happy to learn that mortgage rates continue to be at historic lows. If you have good credit and the right amount of down payment, it is possible to get a 30-year fixed mortgage in the 4 percent range, or a five-year adjustable mortgage in the 3 percent range. If you are going to obtain a sizable loan, the low mortgage rates essentially make the homes much more affordable that it would have been.

In order to find your dream home, you want to see a good supply of houses for sale. A higher supply also helps stabilize the prices. Toward the end of last year, inventory of homes dropped sharply. But we began to see more new listings coming on the market after the holidays.

During the first two weeks of March alone (up to March 18), there have been 38 homes put on the market, compared with 39 in the whole month of January and 43 in February. I believe that the inventory will continue to go up as we enter the spring season, giving buyers even more choices of homes.

In the world of real estate, location is what really matters. Los Altos and Los Altos Hills are some of the most desirable neighborhoods in the Bay Area. And they will always be. The recent slowdown in the local housing market has created excellent opportunities for home buyers to get into these beautiful neighborhoods.

With the mortgage rates at historic lows, home prices at an lower levels and a stable market environment, now is certainly a great time to buy your dream home in my hometown of Los Altos, or in Los Altos Hills.

Winnie Yip Fong, a Los Altos resident and a local realtor, writes a monthly column to provide advice and her insights into the local real estate market. Email her at winniefong.realestate@gmail.com with any suggestions or comments.