After a four-year economic slump that hit the housing industry hard, the bustling sounds of construction are filling the air again as work gets underway on the Oak Creek residential development on Gilroy’s south side.
Nestled in bucolic countryside between Uvas Creek near the intersection of Luchessa Avenue and Monterey Road, the 213-home Oak Creek housing tract is the single largest building project that Gilroy has seen in five years. Mayor Don Gage thinks it sends out all the right signals about the Garlic Capital’s future.
“It’s a positive for Gilroy,” Gage said. “All the developers are trying to get things going.”
As huge, earth-moving machines level the land a homerun away from the baseball diamonds at the Gilroy Sports Park off of south Monterey Road, the development offers a window of opportunity for many would-be homebuyers struggling to get on the rungs of Gilroy’s property ladder.
But before homebuyers start picturing a utopian, stress-free buyers market, Patty Filice of Intero Real Estate cautioned against thinking that a panacea for the city’s housing headache had arrived on the south side.
The headache for Gilroy, explained Filice, is that even with the Oak Creek development there still won’t be enough properties for sale to meet the rising demand.
“I don’t think it will significantly reduce market pressure,” Filice observed. “It’ll still be difficult for buyers to get a home.”
A sea of potential homebuyers buoyed by more dollars in their pockets thanks to an economy on the mend are flooding Gilroy and fighting over the dearth of properties available. Currently there are only around 50 homes floating about on the market.
“We’re having bidding wars on houses,” Gage remarked. “The economy is starting to change.”
Some potential homebuyers – many of whom work in cities such as Los Gatos, Menlo Park and Los Altos – are looking to get more bang for their buck by venturing south into cheaper housing territory, according to Coldwell Banker Realtor Lianne Pinkston.
Los Angeles-based KB Home is the developer aiming to release some of that pressure with Oak Creek. Corporate Communications Director Craig LeMessurier for KB Home said that the first model homes will be open by fall of this year. He expects the first move-ins to take place by early 2014.
The model homes will showcase the company’s six different design layouts. The two-story, single-family homes are available with three to five bedrooms, LeMessurier explained. Home sizes range from 1,800 to 2,400 square feet and are built to order, he added.
KB Homes wouldn’t release the projected price of the houses, but Coldwell Banker Realtor Lisa Cassara estimates that people will be forking out around $500,000 to stake a claim in Gilroy’s southward expansion.
Prices in that range paired with historically low interest rates for prospective homebuyers will see the new homes snapped up quickly, she explained.
“The market for homes is accelerating in Gilroy,” Cassara added. “We’re so short on inventory.”
Gilroy’s housing market gaining momentum is good news for local realtors, but as a “mom and a citizen,” Cassara would like to see things slow down a little. She is concerned that first-time buyers will be frozen out of an aggressive market.
Filice agreed with Cassara’s estimate and predicted that some home prices in Oak Creek could even climb into the low $700,000s, depending on the model requested. Equally important for prospective buyers is location, Filice said. School district location, that is.
“Parents are always looking for the trifecta when it comes to schools,” Filice noted.
Luigi Aprea and Las Animas elementary schools, along with Ascension Solorsano Middle School and Christopher High School are all highly desirable for parents, Filice said, and parents are more than willing to go a little bit extra on their home bids to get their child enrolled in one of those schools.
As stipulated by the Gilroy Unified School District’s enrollment requirements, GUSD is divided into boundaries that dictate what school a student attends, depending on where they live.
Families who live at Oak Creek would qualify to send their children to Las Animas Elementary School and Ascension Solorsano Middle School, but the housing tract is not within the boundaries for CHS. Filice hasn’t found a home in Gilroy where a student would be eligible to attend either of the elementary and middle school combinations with CHS, but she is impressed by the design details she’s hearing about Oak Creek.
“It’s going to be a popular area,” Filice said. “Is it going to be the ‘new’ northwest quadrant? I don’t know.”
In real estate terms, the northwest quadrant is defined as the desirable neighborhoods surrounding CHS, which is located on Day Road, Filice explained.
Whether the houses at Oak Creek are sold quickly or not, adding 200-plus families into the community mix presents its own set of unique issues for Gilroy. In the grand scheme of community development, making sure there is enough space in schools to accommodate all the local children is essential, Gage said.
The City informs GUSD of construction developments starting or in the pipeline and GUSD crunches the numbers to see if classrooms can accommodate the influx, Gage explained.
The district’s Enrollment Coordinator Alma Quintana says GUSD is ready for anything building developers can throw at it.
“We are neighborhood schools,” Quintana asserted. “We never, ever turn away students.”
There are number of ways that GUSD accommodates a growing student population, Quintana explained. That could entail something as simple as hiring on a new teacher to deal with expanding classes, building an extra classroom or situating a portable classroom on school grounds.
“We do what we have to do,” Quintana laughed.
