If you have been waiting to buy a home, NOW is the time.
If you have been waiting to refinance your current home today is the day.
Neither these rates nor the sale prices will remain down here much longer. Some day soon the bills for “CHANGE” will come due and we’ll see the rates begin to rise.
Look at this AP article for more details.
Gilroy home values have already bounced off the bottom. Likewise, Morgan Hill and Hollister homes have seen a balance in demand and supply.
Time for your co-workers, friends and family to make their move.
What do you think?
We have all watched the sales prices of homes drop over the last 3 years. The question is: Will that slide continue?
Single family home values in Gilroy dropped by 35.5% from 2007 to 2008. In 2009 they fell another 18.4% . Townhomes values have likewise dropped: 38.5% from 2007 to 2008 and 29.5% from 2008 to 2009.
The average sales price of Gilroy homes in 2007 was $796,676. In 2008 it was $513,913, and $419,228 was the average sales price for 2009.
Townhome sales show a similar pattern: their average sales price was $426,627 in 2007, $262,566 in 2008, and $185,070 in 2009.
However, it appears that the value slide has hit bottom. A closer look at 2009 average values suggests that we may have bottomed out in 9/09 and are beginning to see a rebound in both single family residence and townhome values.
Morgan Hill & Hollister home and townhomes reflect a similar trend in values although the downward adjustments in value are more dramatic as you go south to Hollister.
(Data: MLSListings)
It is getting harder to find homes for those buyers we have been 
working with for months. The entry level prices are rising and qualifying for prospective buyer’s is shrinking.
After looking at several Hollister homes I heard the frustrated buyer sigh: ”I think we’re just going to wait to buy a home“. I tried to reason with him regarding rising prices and the likely increase in home loan rates. He was just too disappointed to hear anything right then. So, this post is my therapy for today’s weary home buyers.
Home loan rates WILL go up. It’s only a matter of when will they start. All of the attempts to stave off a sick economy cost money and will begin to push rates higher. As they rise, ‘purchasing power’ drops:
Let’s say my buyer waits 6 months and the rates then are up .5%. His $300,000 loan will cost $92 MORE each month than he could get today. To qualify then he will have to earn $225 MORE per month for the same loan he could get now. If his income hasn’t changed his purchasing power will drop by $17,150!
If the rates go up by 1.0% the payment will jump up by $192 per month for the same $300,000 loan he could have gotten today. $192 PER MONTH! Yikes! His income will need to be $460 more per month to qualify for the same loan he could have gotten today. With no change in income, his purchasing power will drop by $32,800!
Postponing the purchase of your home doesn’t make cents. Get a good night’s sleep and go back at it tomorrow. Afterall, somebody is buying these homes. Why not you?
Agent to prospective buyer: “There are 5 other offers on that home“. Buyer to agent: “Ah 
man! I’m getting tired of losing out on all of these homes! What can we do?” Agent to buyer: “Add another $15,000 to your offering sales price“.
That was the approach some agents were taking earlier this year. Many are still. Finally, however, the banks have gotten wise to this ‘blue sky’ approach.
I made an offer for a prospective buyer on a nice Ridgemark home in Hollister. The listing agent informed me there were 4 other offers and 2 were considerably higher offers than ours. Reluctantly the buyers did not want to try again on this home.
What was fascinating however, was the bank countered that the offerees had to agree to pay for the amount over and above the appraised value when it came in. I like that! Finally, some intelligent approaches to this frenzy we’re seeing in the starter-priced homes. If the accepted offer was, say, $350,000, but the appraisal came in at $325,000 the buyer would have to pay $25,000 over and above the appraisal. Of course their loan amount is computed from the appraised value or sales price, whichever is lower. They would pay their down payment PLUS the amount over value.
Hopefully, more banks will begin handling the question of value up front in this manner rather than 3 weeks later when the other prospective buyers have moved on and the appraisal comes in low.
So, what do you think? Will this smooth out the ‘offering’ process some?
In a Hollister listing interview the inevitable question came up and I gave the answer I have heard myself offer more and more lately.
The question: “How much of a commission do you charge”?
The answer: “If your competing homes for sale are offering 2.5 or 3.0% to the selling office you should offer at least 3.0%. The first sale you need to make is the Selling Agent’s interest in showing your home. You want to do everything possible to encourage those agents to enthusiastically promote your home. If you instruct me to collect a lower commission, half of which goes to the Selling Agent, they will see that lower commission when searching for homes to show their buyers. We want to ENCOURAGE them to show your home. A lower commission being offered by you while competing homes are offering more will be discouraging to them.
“The home will sell itself – once the agent and their prospective buyers actually tour your home. We just need to do all we can to make your home appealing to the prospective buyers AND their agent”.
This answer seems to resonate as a new thought with most sellers and typically the issue is settled. Now! If we could just find a buyer for this nice, upper-end home! Anyone want a producing vineyard and nice home in the Spring Grove Area of Hollister?
If you have been waiting to buy a home in Hollister review the following sales activity and then go buy your Hollister home.
The Average Sales Price (ASP) increased 15.2% from May to June! Hollister’s ASP in June was $287,900 whereas a month earlier the average was $249,900. Compared to June 2008 however, Hollister’s ASP was down 14.7% .
A valuable indicator: the “Closed Sales to New Listings ratio” (CS:NL) is actually in conflict with the jump in ASP. June’s CS:NL ratio dropped to 56.9% from May’s 89.6%. We saw the same drop in Gilroy for June however, their ASP also dropped. The harbinger of things to come, may lie in the nice increase of Hollister’s CS:NL over 6/08’s ratio of 40.2%. Just wait and see. As our CS:NL ratio increases so will our ASP.
Nearby Morgan Hill’s homes experienced an increase in both the CS:NL ratio and ASP.
My strong advice: if you plan to buy a home this year do it now. We see nothing that suggest prices will drop or even level off in the foreseeable future. Likewise I think interest rates for home loans are about as low as they are going to get.
For your own study of the actual Multiple Listing Service figures go onto “Client Portfolio” on the navigation bar. There you can see a great deal of real-time data. Enjoy.
Here’s the good news Gilroyans: Our Closed Sales-to-New Listings-Ratio (CS:NL) nearly doubled that of 
the same time last year. June’s CS:NL ratio was 87.3% vs. 47.6% in June last year. The “bad” news is that June’s CS:NL ratio was down from May’s 93.5%.
As you would expect, Gilroy’s Average Sales Price (ASP) of $395,900 dropped 3.8% in June from the month prior ($411,500). Likewise, the ASP was down 32.5% from 6/08’s $586,800.
While interest rates and prices are still down buyers who want the American Dream, Gilroy-style, should jump on the shrinking inventory of homes. Gilroy’s home prices will go up.
Down the road in Hollister the CS:NL ratio also dropped from May to June but the ASP went UP 15.2% in that same month! Compared to ‘08 Hollister is following Morgan Hill and Gilroy’s trend of an increasing CS:NL ratio.
For your own study of the actual Multiple Listing Service figures go onto “Client Portfolio” on the navigation bar. There you can see a great deal of real-time data. Enjoy.
I had fun making the Video Tour for 1890 Orchard Rd. in Hollister, CA. Why not take a few minutes to watch it? As you do you will notice 3 things: One, this fresh 3 bd. 2 bth. home is nicely appointed and quite comfortable: Two, it sits on a peaceful, flat 5 acre parcel and is all decked out for your horses; and Three, this home is only a 1/4 mile from the Santa Clara County line so it is perfectly located for a comfortable commute, shopping at the Gilroy Outlets, hitting the beach or walking along famed Cannery Row. 15 minutes South and you are in Hollister. Another 30 min. and you arrive at the Pinnacles National Monument and, in 40 min. to the East you are on Hwy. 5 heading for Yosemite or Disneyland. Give me a call for your own tour of this nice property. I promise – you will be impressed.
Hollister’s housing is HOT! Last month (5/09) saw 27 more Closings than 5/08’s 33. That is an increase of 81.8%! Each month this year our number of Closings has leaped ahead of ’08’s. To date there has been a 151% increase in Closed Sales! In fact, try to buy a home in Hollister now. “Multiple Offers” is once again a standard phrase reported to buyers by their agents.
Contributing to this hot market: New Listings of homes for sale in Hollister are down 27.9% so far this year over last year. Last month alone we saw a drop in New Listings of 29.5% over 5/08.
The Gilroy housing market is experiencing a similar recovery with a 128.9% increase in closings and a 32.7% decrease in New Listings.
Make sure your Realtor knows all the current methods in getting an offer accepted. You are going to need that if you want to buy a home here in Hollister.
