The median price of a home in Gilroy was $718,000 at the end of
June
Gilroy – The number of homes up for sale in Gilroy have spiked in recent months but real estate agents have mixed opinions on whether the housing market is cooling off.
The latest real estate listings show the city had 175 homes on the market and 55 completed sales in July, compared to 127 homes on the market and 61 sales in March, according to the latest real estate listings.
Michael Giluso, a San Jose-based real estate agent and Gilroy resident, believes the housing market may finally be cooling off.
“There was a house on Welburn (Avenue) that last year would have sold in a day,” Giluso said. “It was on the market for two or three months. They had to lower the price three times. To me that’s a sign that buyers are becoming more savvy. There’s a higher supply, there’s less demand. People basically are now understanding that these interest-only loans are great for five years, but then they’ve got to make the payments. So now they’re not buying more than they can pay for.”
He qualified his analysis, however, by saying that homes in the 500,000 to 600,000 range are “going relatively quickly,” while homes in the million-dollar range take longer to sell.
The median price of a home in Gilroy was $718,000 at the end of June, $630,000 at the end of March, and $590,000 at the end of 2004.
The median price of single family homes sold in Morgan Hill at the end of June was $830,000, a jump from the median price of $770,000 at the end of March. That figure increased from the median price of $731,000 at the end of 2004. Only a year ago, the median home price in Morgan Hill was $650,000. And five years ago, it was $508,000.
“During the first quarter (of 2005), it was tough. There were few properties, people were bidding on so few properties,” said Kevin Moles, vice president and managing executive of Morgan Hill’s Intero Realty. “It’s not like it was in January. Now, we have more inventory, so there are more choices for the consumer.”
In Gilroy, the average home sat on the market for 27 days in July, compared to 19 in March.
The city lies on the southern edge of a market that face a real estate meltdown in coming years, according to some analysts.
The housing markets most susceptible to a sharp downturn in prices are in California, Massachusetts and New York, according to PMI Group Inc., a mortgage insurance provider based in Walnut Creek.
Based on a recently completed analysis, PMI predicted that six major metropolitan areas face at least a 50 percent chance of enduring a drop in home prices within the next two years: Boston-Quincy, Mass.; Nassau-Suffolk, NY; San Diego County; Santa Clara County; Orange County; and the East Bay.
In the nation’s 50 biggest markets, the average risk of a price decline during the next two years stands at 21 percent, PMI said.
Susan Jacobsen, with Starritt Realtors, acknowledged that inventory has increased, but she dismissed the paranoia about housing bubbles.
“Definitely there’s more to show buyers than in the beginning of the year, when there were one or two houses at a time. Now you might have 12 or 14,” Jacobsen said. “In the first part of the year, because the inventory was so low, location and condition didn’t matter … Now we’re getting back to the point where … you have a little competition.”
She said the availability of zero-interest loans are still fueling multiple bids and high prices. The latest sales prices appear to support that theory. In Gilroy, the median home price has remained above $700,000 since April.
“I don’t think the market’s cooled,” Jacobsen concluded. “It may take 14 days to get an offer, but I remember the days when we had (homes) on the list for 90 days and then re-listed them.”
Reporter Rose Meily contributed to this report.
