Once the long Labor Day weekend is over, Silicon Valley residents who want to buy homes will start hitting the open-house circuit in earnest, real estate agents say, eager to make purchases before the holiday season begins.
"August is always the dog days of the stock market, but also the real estate market to a certain extent," said Fred Hibbert, manager of a Coldwell Banker office in Los Altos.
"September and October are really the more robust market for folks who want to get something done by the end of the year."
That's the conventional wisdom about autumn. But with local foreclosures at record highs, and mortgage availability continually changing, it's hardly been a conventional year for home buyers and sellers. What will happen this fall is still anyone's guess.
It's clear that with prices declining in many parts of Santa Clara County, sales generally accelerated this summer, especially among less expensive homes.
James Nichols, a manager with Prudential California realty brokerage firm in San Jose, thinks that momentum will continue. Many bank-owned foreclosures are selling quickly, and he's seen a small flurry of lower-priced condos sell lately.
"Some are under $250,000. There are great opportunities out there," he said.
Nichols said he thinks transactions will increase in September compared with August - if nothing drastic happens to upset buyers' ability to obtain mortgages.
"Is the financial sector going to be able to feed the demands of the home buyers, moving forward? That's really the big unknown right now," he said.
Interest in market
Jeffrey Lo and his wife, Patty, illustrate that the year-end market could go either way in Silicon Valley.
"We're still very interested in buying, but we're still also interested in waiting and seeing," Lo said. The 31-year-old software engineer has been actively looking for a home in Sunnyvale or Cupertino for about six months, recently making an offer on a townhouse and losing out to another bidder.
He knows a few people who have lost their jobs recently and wonders whether Silicon Valley can stay insulated from the faltering national economy much longer. Though he wants to buy, "I'm going to step back and not get overly emotional about the purchase."
Many real estate agents also point to the relatively high number of "pending" sales in Santa Clara County as evidence of a market that's rebounding after a slow first half of the year. More than twice as many home sales were pending this week than last year at this time, Hibbert said. "Pending" means sellers and buyers have signed a purchase contract; there are different categories of "pending," based on how close the sale is to being complete. For example, as of Friday there were 1,125 single-family houses in the county whose sales were at the brink of completion, said Audrey Sutton Shilling, president of Los Gatos-based Asante Real Estate.
"I really think that these next two months are going to be probably the best months of 2008" in terms of finalized sales, she said.
So far this year, June posted the year's best sales volume for single-family houses, with 966 changing hands in the county, according to multiple listing service data.
What's 'pending'?
But other agents, including Jason Chan Lee of brokerage Silicon Valley REO, said pending sales figures are unreliable. Lately, he said, many pending transactions fall apart, either because the buyers' loans don't come through, or because buyers who need bank approval for their "short sale" purchases get tired of waiting and move on to other properties.
Short sales occur when homeowners sell their property for less than they owe their mortgage lenders; lenders must approve the transaction, and the process can take months.
Despite what many in the real estate business perceive as a bustle of activity after school starts, sales don't actually spike in fall, said number-crunching broker Richard Calhoun of Creekside Realty in San Jose. Sales tend to decline from Memorial Day through Labor Day, and then merely flatten out in late September and October. The decline continues again in November, December and January.
Calhoun wouldn't make a prediction about this fall, saying only that as of August, "the market is following fairly normal seasonal trends."
Contact Sue McAllister at smcallister@mercurynews.com or (408) 920-5833.
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