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)

Be a Contrarian – Buy a Home NOW.

We have short memories;  we don’t keep track of data; and we listen to NATION trends rather than study OUR community’s trends.

When we do look back and consider the cyclical nature of the housing market we’ll see that the peaks and valleys are very predictable.

So when I came across this presentation I was impressed.  I began thinking: “Let’s see, how can I buy another home?”

A contrarian, by definition, buys when the masses say not to and sells when others are buying.  It is not coincidental that successful investors march to their own trend-studies and, not do follow the mass media’s reactionary reporting.

So. What do you think?  Ready to brave the storm and buy a home?  Everyone else is selling.  I know just the expert who can help you.

Hollister Home Values, Turning Around

We all know home values have dropped over the last 3 years.  Will that slide continue?

Single family home values in Hollister dropped by 41.6% from 2007 to 2008.  In 2009 they fell another 17.4% . Townhomes values have likewise dropped: 54.3% from 2007 to 2008 and 25.5% from 2008 to 2009. 

The average sales price of Hollister homes in 2007 was $548,562.  In 2008 it was $320,419, and $264,601 the average sales price for 2009.

Townhome sales show a similar pattern: their average sales price was $339,780 in 2007, $155,354 in 2008, and $115,725 in 2009.

However, it appears that the value slide has hit bottom.  A closer look at 2009 average values suggests that we may have bottomed out in 9/09 and are beginning to see a rebound in both single family residence and townhome values.

Morgan Hill & Gilroy home and townhomes reflect a similar trend in values although the downward adjustments in value are more dramatic as you go south to Hollister.

(Data: MLSListings)

Sales Prices vs. Appraised Values

Agent to prospective buyer: “There are 5 other offers on that home“.  Buyer to agent: “Ah man! I’m getting tired of losing out on all of these homesWhat can we do?”  Agent to buyer: “Add another $15,000 to your offering sales price“. 

That was the approach some agents were taking earlier this year.  Many are still.  Finally, however, the banks have gotten wise to this ‘blue sky’ approach. 

I made an offer for a prospective buyer on a nice Ridgemark home in Hollister.  The listing agent informed me there were 4 other offers and 2 were considerably higher offers than ours.  Reluctantly the buyers did not want to try again on this home. 

What was fascinating however, was the bank countered that the offerees had to agree to pay for the amount over and above the appraised value when it came in.  I like that!  Finally, some intelligent approaches to this frenzy we’re seeing in the starter-priced homes.  If the accepted offer was, say, $350,000, but the appraisal came in at $325,000 the buyer would have to pay $25,000 over and above the appraisal.  Of course their loan amount is computed from the appraised value or sales price, whichever is lower. They would pay their down payment PLUS the amount over value.

Hopefully, more banks will begin handling the question of value up front in this manner rather than 3 weeks later when the other prospective buyers have moved on and the appraisal comes in low.

So, what do you think?  Will this smooth out the ‘offering’ process some?