Areal estate pricing barrier has been broken in Gilroy: A house
in the city’s traditional core is on the market for more than $1
million. To be exact, the four-bedroom, two-bath home at 7590
Princevalle St. has an asking price of $1,198,500.
Areal estate pricing barrier has been broken in Gilroy: A house in the city’s traditional core is on the market for more than $1 million. To be exact, the four-bedroom, two-bath home at 7590 Princevalle St. has an asking price of $1,198,500.
We wish we were surprised, but, sadly, we’re not. Like everyone who watches the Bay Area real estate market, we’ve seen home prices spiral during the dot-com boom, then continue to spiral in the wake of the dot-com bust.
It’s important to remember that the hot Bay Area housing market is a double-edged sword.
For those of us who are fortunate enough to own Bay Area real estate, the continued rise in prices is good news, leading to higher and higher amounts of equity and increased net values of our assets, at least on paper.
For those of us who have not been able to purchase homes, the seemingly unstoppable real estate market places the American dream of home ownership out of reach for many.
Whether you’re a homeowner rooting for the real estate bubble to continue to grow, or a renter hoping it will burst, we all have to wonder: Will it burst, and, if it does, what will serve as the needle that punctures it?
Will it be higher mortgage rates, fueled by increasing national debt?
Will it be continued weak employment, due to outsourcing of jobs to cheaper labor markets like India and China?
Will it be the impending retirements of huge numbers of baby boomers eager to cash out their equity, causing a flood of listings?
Lacking a crystal ball, we can’t say when or why the bubble will burst. But painful stock-market corrections and the dot-com crash have taught us a lesson: The real estate market can’t continue like this forever.
So, while a million-dollar home in the city core is dizzying, it is also a warning sign: Be careful with how you finance your home purchase, with how you’re planning to pay for your retirement or children’s college educations, with the timing of a first-time or moving-up home purchase.
Because when the real estate bubble bursts, it will hurt some and help others. As much as possible, plan ahead, spend your housing dollars prudently, and finance carefully so that you and your family are in a position to benefit as much as possible and be hurt as little as possible when the market finally pops.
