Hollister Homes Highest Value Gain

Hollister, CA

Of the 3 cities which make up ‘ South County‘, the City of Hollister, CA single family residences saw the highest appreciation from 1st quarter 2013 to 1st quarter 2014.

The average Hollister single family residence (SFR) value rose 23.1% whereas Morgan Hill, CA experienced 21.9% and the City of Gilroy, CA saw their SFR rise by 11.2% from 1Q13 to 1Q14.

However, Hollister’s typical SFR value dropped 43% from 1Q07 (when many say the bubble burst) to 1Q13. Morgan Hill dropped 32.5% and Gilroy 30.6% during this same period.  Hollister’s ave.  SFR value in 1Q07  was $302,383, down to $240,798 in 2013 and up to $274,309 1Q14.

Another indicator of Hollister’s recovery is the time it takes homes to sell.  The average days on the market in 2007’s 1st quarter was a whopping 148 days.  In 1Q13 the time dropped to 124 days on the market.  That is a 69% improvement!  Then, this year we watched the average days on the market drop even further to 24.

Finally, the average Sales to List price ratio was 99.5% in the 1st 3 months this year compared to slightly over 96% in both ‘o7 and ’13 first quarter.  They are selling faster and virtually at their asking price.

What do you think this trend will do?

(data source: MLSListings)

Home Prices in Gilroy, CA

City Gilroy

Gilroy, CA is not only known as the “Garlic Capital of the World” but it is also known for its robust housing market.

Using the first quarter of 2007 (1Q07) as a high point in,  and the beginning of decline of market values, there are some interesting changes which point to a strong recovery:

The average number of days it took for homes to sell in 1Q07 was 141. Then, in 1Q13 it had dropped to just 36 days, and, 1Q14 days on market slipped up to an average of 45 days. Obviously, homes are again, selling much faster but the pace is slowing.

Gilroy CA’s average sales price for single family residences (SFR) in 1Q07 was an amazing $785,763!  By 1Q13 prices dropped to $544,965. In the year since, the average prices continued to increase: 1Q14, the average was $605,845.

Another indicator of a recovered market is the ratio of sales price to listed price. In 1Q07 the average was 97.7%; in the first quarter of 2013 it was 98.7% and in the 1st 3 months of this year it averaged 96.2%.  Again, 2014 is still improving but it seems at a slower pace.

Relatively speaking, Gilroy had the least significant drop in prices of the other South County neighbors: Morgan Hill and Hollister. Gilroy’s drop 1Q07 to 1Q13 was 30.6% while Morgan Hill’s was 32.5% and Hollister saw a 43% drop in that time frame.

So, what do you think values are going to do here in South County in the near future?

(data: MLSListings)

Smart Home Purchase = Good Investment

home's appreciationAfter nearly 8 years Americans are once again considering the purchase of a home as an investment.

As in all good investments you want to “buy low and sell high” with regard to your home.  As this article points out there are 4 key considerations when buying a home with “investment” in mind:  Don’t buy the nicest home in the neighborhood; look for a home which needs a little T.L.C.,; of course location is very important and plan on living in the home at least 5 years,.  10 years is even better.  Regarding location, look for a home in a nearby suburb of a job-rich metropolitan area and, off the main thorough fairs.  Morgan Hill, Gilroy and Hollister, CA for example, are ideal communities near the San Jose and Silicone Valleys.

The other side of the home buying equation is the financing of it.  With the goal of living there at least 5 years it actually pays to buy down the interest rate of your home loan.  If you pay 1.5 to 2.0 points (percent of the loan amount) you should be able to lower your rate by .25% for the term of the loan.   This little tax deductible investment will repay itself within 3 – 4 years through the savings in house payments and will save 10s of thousands of dollars in interest over the life of the loan.

Lastly, design your budget to allow an extra payment toward the principle loan amount.  Just an extra $100 or two paid with your regular payment each month will reduce the number of years you will pay on the loan and builds equity much faster.

Buying smart imitates the investment growth and the extra payments on points and principal will quickly grow your equity.  When time comes to move up or, out, you should have a sizable profit from your home’s investment.

What’s your ‘buy low sell high” success story?

 

 

Rent vs. Buy: Cheapest?

We know what the acronym A.S.S.U.M.E. really means, right?  Here is a good example: “Renting is cheaper than buying“. Simply assuming that paying rent costs less than making a house payment is ignoring many factors: the interest portion of the principle & interest and, the property tax portion of a house payment are tax deductible.  Appreciation also needs to be placed in the equation: rent payments will go up; home values (typically) go up while the house payment remains unchanged.

Would you believe this holds true even in San Francisco, Oakland and San Jose, CA?  As the attached article demonstrates, these and other cities have home purchase costs lower than paying rent.  In San Jose, CA for example, the difference is 9%.

If the rent vs. house payment debate wins in these large, metropolitan cities, we can assume (oops, here we go again) that the more affordable cities like Morgan Hill, Gilroy and Hollister, CA will have an even bigger difference favoring the purchase of a home vs. renting someone else’s.

Why not take a challenge?  Text or email me your city and the amount of rent you pay.  I will give your own comparison.

Drop PMI from Your House Payment


paymentsREDUCE YOUR HOUSE PAYMENT BY $220/mth*

Since home values have risen over the last 18 months we are often asked: “How do I drop that Private Mortgage Insurance (PMI) from our house payment?”

So here is the Good News and the Bad News:

Good:  “The Homeowner’s Protection Act of 1998“: home lenders MUST drop the PMI when the loan balance reaches 78% of the original value.

Bad: “78% of ORIGINAL VALUE” means the price you paid for the home, NOT today’s appreciated value. Additionally, most lenders require that you have a 2-5 year payment history with them before they will consider your request.

Additional ‘Bad’: Even if you have paid extra toward your loan balance the lenders look to the original amortization schedule to determine when you reach 78% in order to drop the PMI.   That typically takes 9 – 10 years.

Once you have 80% equity you can ask the lender to cancel your PMI however, there is no guaranty they will.

While the Federal Housing Administration (FHA) is not governed by the same law they do have a similar ‘78%’ rule with the added proviso that the payment needs to have been made for at least 5 years or your balance is 78% of the original value – whichever comes later.   FHA’s insurance for loans originated after 7/1/2013 however, is permanent.

Good:  You don’t have to wait for the magical date on your amortization table…you can refinance your current loan.  In the South County (Morgan Hill, Gilroy, Hollister, San Juan Bautista) home values rose over 36% in 2013 from 2012.  With at least 20% (new equity) your new loan will not need PMI.  On a $300,000 purchase where you put originally put 5% down to a $285,000 loan, the PMI would cost roughly $220 every month*. Even if you include the closing costs in your refinance loan you will still have a lower payment due to no PMI; probably a savings of $150 or more per month.

In a 5 minute visit I can tell you what YOUR particular numbers will look like.  Text, email or call me.  Let’s get rid of that PMI before another month rolls by.

 

Hollister, CA Home Values Up 36%

home's appreciationThe average home value in Hollister, CA rose 36% over the last 6 months as compared to the same period last year (June to the end of Nov.)  Homes sold for an average of $421,798 this year vs. $316,894 for the same time last year in Hollister.

There are 3 indicators which provide some measurable reasons for this significant increase:

  1. The number of home for sale dropped from 323 in ’12 to 283 during the same 6 months this year.
  2. The average number of days on the market dropped from 54 last year to 44 days this year. That 19% decrease suggests a robust demand.
  3. Finally, the actual sale price was 102% of the asking price in the last 6 month where last year’s relationship of “asking and actual” was 99%.

Gilroy, CA has experienced similar appreciation.  The South County (Morgan Hill, Gilroy, Hollister and San Juan Bautista, CA) is a favorite ‘bedroom’ community for Bay Area employees.  Gilroy & Morgan Hill home values were just as impressive.

What does this mean for home values in 2014?  Probably more of the same.  Do you think we’ll see the same pace?  Are we headed for another bubble?  Watch the home loan interest rates.  Their direction will have an inverse affect on the rate of appreciation: if they go up significantly or, quickly, all 3 factors above should head in their opposite direction.  The rate of appreciation will slow or stop – depending on the severity of the rate changes.  Stay tuned.  It’s going to be exciting!

(data from MLSListings)

 

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Gilroy, CA Home Values UP 32%

4954639852_42897c0ca11The average home value in Gilroy, CA rose 32% over the last 6 months as compared to the same period last year (June to the end of Nov.).  Homes sold for an average of $611,850 this year vs. $462,083 for the same time last year in Gilroy.

There are 3 indicators which provide some measurable reasons for this significant increase: The number of home for sale dropped from 298 in ’12 to 267 during the same 6 months this year.  Classic “Supply & Demand, 101” is in play here.  The average number of days on the market dropped from 50 last year to 40 days this year. That 10% decrease suggests a robust demand.  Finally, we saw asking prices and actual sale prices were virtually the same this year as well as last year;  Two years now of firm sales prices.

Morgan Hill, CA has experienced similar appreciation.  The South County (Morgan Hill, Gilroy, Hollister and San Juan Bautista, CA) is a favorite ‘bedroom’ community for Bay Area employees.  Hollister and San Juan Bautista home values were even more stunning.  I will post their reports soon.

What does this mean for home values in 2014?  Probably more of the same.  Do you think we’ll see the same pace?  Are we headed for another bubble?

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San Jose 4th Fastest Turn-Around Values

This study shows San Jose, CA as the 4th of 10 top real estate areas in the US where home values continue to increase.

Likewise, the South County communities, who supply much of the employment for the San Jose area, have been experiencing the same appreciation.  Morgan Hill, Gilroy and Hollister’s home values have all risen proportionate to that of #4 in the nation, San Jose.

So, is this another inflating bubble?  Will we see another bubble burst?  What if the interest rates keep going up will that slow down the appreciation?  What if the bank’s bulging inventory of foreclosed homes came onto the market at a faster pace than the trickle of token homes we have seen over the last 14 months?

What do you think?

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Housing Values At The Bottom Yet?

Remember when we were on a road trip with the kids in the car?  What was the question they always got around to?  “Are we there yet?”

Nearly every day people ask me the same question relative to home values: “Are housing values at the bottom yet?”  The answer varies depending the area you are asking about.

In this article Forbes provides mixed answers:  homeowners in the San Francisco Bay Area may “be there”.  Other places in CA and around the country, however, may have a ways to go yet before their house-value-slide ends.

San Jose was specifically listed as one of the few metro area where values seem to have leveled.  This continues to be good news for Morgan Hill, Gilroy and Hollister home values.  With the majority of South County residents commuting up into the Bay Area, home values in these three cities will continue to follow San Jose’s lead.

So, Johnny, we’re there –  but we won’t be returning to increased values for some time to come.

Nice 4 bd., 2 bth., 16,500+ sq. ft. lot.

1291 Bonnie View Drive, Hollister: A completely remodeled, 4 bed. & 2 bath home on a 16,500 sq. ft. lot!

Watch the VIDEO Tour of this nice home.  You’ll note that nearly everything, even the plumbing, has been redone.  Have you heard the term: “turn key“?  This home is it.  Just put in the key and move right in.  There is virtually nothing left to do.

The wide side yard access to the huge back yard provides endless possibilities: A large garage/workshop, toy barn, pool etc. could easily fit into this back yard.  In the VIDEO you can see what the neighbor did with his same sized lot.

From this home you are less than a quarter mile from Hwy 25’s extension for an easy drive to Gilroy‘s Premium Outlet Center and CalTrain for a convenient commute.  Schools, shopping and medical facilities are within walking distance.  Veteran’s Memorial Park with its 5 baseball diamonds, skate park and picnic area is also just a short walk.

As close as this home is to everything, Bonnie View Rd. is not a through street so there is little traffic.  It is a quiet neighborhood.

This is NOT a short sale or bank owned sale. You will deal with the actual seller and can expect to close in a matter of weeks.

For your own personal tour of 1291 Bonnie View Rd. just call/text or e-mail me and I will arrange it for you.

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