Seller's markets, those areas in which there are few homes for sale compared to the number of available buyers, are experiencing record gains, but few are seeing the kind of bargaining that is going on in some of the hotter markets.

Bidding wars take place regularly in hot relocation markets such as San Francisco, Atlanta, and Dallas, but now Palo Alto, California can be added to the list. That's where a four-bedroom, 3,700 square foot home, listed at $2.2 million is the center of a bidding war, until a buyer upped the ante by $1 million over the asking price to $3.2 million. The same property had sold in 1989 for $1.4 million. That is the second time in the Silicon Valley region that a buyer has offered so much more than the asking price of a home, especially in the luxury market where buyers are few even in hot markets.

Agents and buyers in the area are stunned. Brokers are reporting steadily rising prices and a frenzied attitude on the part of buyers who seem willing to pay any price to get a home.

The news caused one buyer, a Palo Alto resident, to blanche. She and her family are looking for a larger home. " I guess we may have to pay more than we originally thought,'' she said, in an interview with the San Jose Mercury News.

Like most seller's markets, Palo Alto has a number of things going for it. One hour out of San Francisco, and part of one of the nation's hottest relocation areas, Silicon Valley, scenic Palo Alto appears to offer a convenient bridge for affluent commuters. It has the reputation for excellent schools, a family-friendly environment and an upscale downtown area.

The median home price is $650,000 and rising due to a lack of inventory for sale. A week ago, there were fewer than 35 unsold homes available in the city. Sixty two homes are under contract, but area brokers maintain that under normal circumstances, there would be twice as many homes available for sale as those under contract. Homes are selling quickly, in under a month, spurred by stock-rich buyers who are willing and able to pay large figures for the home they want.

In a seller's market like Palo Alto, there is a clear shift in power from the buyer to the seller. The seller kicks back and demands such things as high selling price, closing costs to be paid by the buyer, and concessions on repairs, terms and other aspects on the transaction. When multiple offers start to roll in, the seller is in a position to pick and choose which ones s/he wants to negotiate. Offers over asking price become more common. But in Palo Alto, the seller's market is a whole new ball game.

And you thought your seller was driving a hard bargain.

Published: April 6, 1999

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Blanche Evans is the award-winning senior editor of Realty Times, the Internet's leading independent real estate news service. She is featured daily on the Realty Times Video Network in the "Realty Viewpoint" segment. Blanche has been named one of the "25 Most Influential People In Real Estate" by REALTOR Magazine, and has been twice recognized as a "notable." In 2005, she was named "Top Reporter Covering the NAR" by Delahaye-Bacon's. Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. To contact Blanche, email her at . For more articles by Blanche, click here.