While foreclosures and tight credit drag down property values
and stifle the larger economy, the upside for home buyers is much
cheaper stock.
While foreclosures and tight credit drag down property values and stifle the larger economy, the upside for home buyers is much cheaper stock.
In Gilroy, the median home price fell from $575,000 in January 2008 down to $350,000 a year later, according to the Santa Clara County Association of Realtors. Janelle and Mike Ratcliff, who married in October 2007, entered that 40-percent price drop last August when they bought their first home, becoming one of the latest Gilroy couples to obtain the American Dream.
“These are ideal clients because they have credit and they had some money set aside,” Realtor Lisa Cassara said of young first-time home buyers like the Ratcliffs and well-qualified investors who have started to outbid each other on desired properties. Throughout the past few months, Cassara said first-timers and investors have become the majority of her clients.
“The market has changed drastically over the past few months,” she said, adding that “it’s impossible to beat” loans from the Federal Housing Authority that only require a 3.5 percent down payment and reasonable credit.
When the Ratcliffs bought their home last August, the median home price in Gilroy stood at $425,000. The young couple noticed the trend and decided to seize the opportunity, Mike Ratcliff said. They eventually bought for $357,000 and now reside in a 1,200-square-foot, three-bedroom, two-bathroom home.
“As soon as everything started going bad, and all the foreclosures started coming up – you open the paper and see 50 foreclosures in one week – we decided it was probably time to start looking,” Mike Ratcliff said.
And look they did, at 25 homes before between here and San Jose before the 27-year-old car painter and his 24-year-old wife, a registered dental assistant who grew up in Gilroy, decided to buy a home here and fix it up a little.
“We installed a new dish washer, remodeled the bathrooms – normal fix-it-up stuff,” Ratcliff said.
