While some areas of Santa Clara County have been seeing increased buyer activity, Gilroy's real estate market continues the trends of the last year. Further North, high end environments such as Los Gatos and Saratoga have been seeing a tightening of inventory with the result being multiple offers and quick sales for well priced properties.
Gilroy, however, continues to have a relatively high number of short sales and lender owned properties combined with cautious buyers. Well known as a family oriented city, Gilroy has been a favored place to live for those wanting access to Silicon Valley without the high prices for homes. However, a larger percentage of Gilroy home owners may have been affected by the economic downturn resuting in a higher number of distressed properties. More distressed properties often result in a lower market prices and great buying opportunities - but at the same time new buyers sometimes become more cautious. They see the results of those who became too adventurous, and so are wary of over committing themselves.
Inventories have gradually risen, but closed sales have not. The result is Gilroy is more of a buyer's market than elsewhere. With over seven months of inventory (number of homes on the market divided by the number of closed sales), combined with a number of distressed properties, prices in Gilroy have become very attractive.
Recently the median price of sold homes has come down. In February, the median price in Gilroy dropped significantly while the average price went up a bit. This would indicate a larger number of modestly priced homes sold as well as a few high priced homes. Investors see this, and are constently looking for opportunities to buy at a modest price, fix up the home, and resell at a profit. Such strategies used to be discouraged by lenders, but they are becoming a little more accomadating.
If you are looking for a modestly priced home in a good community close to Silicon Valley now may be the time to act. Most pundits predict an inevitable rise in interest rates which will reduce buying power, and prices show little downside risk and lot of upside potential as the economy improves. Almost assuredly people will be talking for years about the great real estate buying opportunity we are going through, and some will be saying how they were able to take advantage of it. Silicon Valley is leading California's recovery with respect to jobs and business opportunities. The demand for homes will likely improve with Silicon Valley's economy.
Regards ... Wayne