GILROY
– Seeing seven figures on a price tag is scaring away many
Gilroy-area home buyers, despite a solid mid-range real-estate
market.
GILROY – Seeing seven figures on a price tag is scaring away many Gilroy-area home buyers, despite a solid mid-range real-estate market.
Bridlewood, a new housing development at the end of Mantelli Drive, recently slashed its prices by up to $300,000 to duck below the million-dollar mark. In June, Bridlewood price tags ranged as high as $1.2 million, but now the same houses top out in the high $900,000s. Bridlewood’s less expensive homes were also reduced, from the high $800,000s to the mid $700,000s.
It’s working, according to Sales Representative Marlene Martorello. As of June, Bridlewood was only selling about one home a month. Recently, they sold eight homes in two weeks.
“We’ve been incredibly busy,” Bridlewood Sales and Options Coordinator Debbie Garcia said.
“You can only go with what the market will bear,” Martorello said. “In the beginning, we sold them right away, but then the market turned.”
After the price cut, Martorello said, she saw some familiar faces show up to look at homes. Several people who had passed the first time around bought the second time, she noted.
The Bridlewood price cut is evidence that high-end home prices in Gilroy are receding, according to local Realtors.
“The higher end is getting less than what they’re asking for,” said Ryan Mull, a Realtor at Century 21 Premier in Gilroy. “Owners are getting more realistic. I would say, three or four months ago, owners were a little unrealistic.”
Realtor Rick Patereau, of Intero Real Estate, said many buyers are becoming shy of seven-figure prices.
“Areas where, two years ago, (houses) were selling for a million-plus, are sitting on the market now at over a million,” Patereau said. “You have to put it at under a million before you see any activity.
“A lot of the really high-paying jobs in the Silicon Valley have disappeared. So that’s put a lot of downward pressure on the high-end homes.”
Nancy Robinson, of Coldwell Banker, concurred that higher-end housing “isn’t moving as quickly” as homes in other price ranges. In such a market, she said, “overpriced homes” just don’t sell as fast.
Mid-level real-estate prices, however, are generally stable and are seeing slight gains, Realtors agreed. Eagle Ridge, another new housing development on Gilroy’s west side, saw enough interest in its Courtyards, a set of four- to five-bedroom homes priced in the $500,000s, that it used a lottery to sell them, staff there confirmed.
Robinson said she’s seen more first-time homebuyers than usual taking advantage of this year’s low interest rates, which bottomed out in mid-June at 5.21 percent for a 30-year mortgage – the lowest in four decades – before rising 6.44 percent presently.
There are also a number of people finding they can get more house for their money in Gilroy than in San Jose or the northern Silicon Valley, Robinson said.
“With the (U.S. 101) freeway widening (earlier this year), we’re seeing a lot of people being interested in South County,” Robinson said. “The commute is easier.”
She said she’s also seen a number of people check out real estate while in town to visit Bonfante Gardens.
“I think Gilroy, by all means, experienced growth in the past year,” Robinson said.
Nevertheless, any real estate gains in Gilroy are puny compared to those of California as a whole. The average sale price of a California home went up 19.1 percent from July 2002 to July 2003, and the number of sales increased 10.2 percent, according to a report by the California Association of Realtors. The median price of a home in California rose to $383,320, its highest value ever.
Los Angeles and the Central Valley made the greatest gains, while Bay Area home sales dropped by 7 percent. The value of a Bay Area home, however, rose by 3.6 percent to $560,240.
Patereau estimated the median sale price of an existing, single-family home in Gilroy to be in the high $400,000s.
