The graph above of Santa Clara County residential real estate transactions visually tells the story of our bumpy ride the past five years.  At the far right of the graph, you’ll see 05/01/09.  Notice how the pink line (pending single family residence listings) and the blue line (active single family listings) are approaching each other.  That’s a good thing!  We are approaching a much more balanced market.

Now notice one year previous, May of 2008.  The blue and the pink line have a huge gap between them.  Listings pending under contract were rarer at that time, but the active listings were plentiful.  Can you say buyer’s market?  Now glance back to the left of the graph for the years 2004, 2005 and roughly the first half of 2006.  This shows that the pending sales were right on par with the active listings.  Very much a seller’s market because there was a small supply of homes available and there was a large demand.

This graph tells the story visually of how market conditions effect can effect pricing, days on market and other real estate metrics.

The number of residential sales was down last week compared to the large numbers we have been seeing so far this year in the south Santa Clara County towns of Morgan Hill, San Martin and Gilroy.  There were 30 residences that went from active to pending status as compared to 47 last week.  Of all the sales last week, 27 were single family homes and 3 were townhouses/condominiums.  70% of the sales were priced below $500,000.

Of these sales, the list price ranges were:

Below $200,000 = 1 sale (3.3% of total)

$200,000 - $500,000 = 21 sales (70% of total)

$500,000 - $800,000 = 6 sales (20% of total)

$800,000 - $1,200,000 = 1 sale (3.3% of total)

$1,200,000 - $2,000,000 = 1 sale (2% of total)

As of February 22, 2009, there are 564 residential (single family homes and condos) listings active on the market in Morgan Hill, San Martin and Gilroy.  There are currently 284 pending residential listings.  Therefore, 33% of the total listings are pending under contract as of this date.  Many of the pendings are short sales and therefore take a long time to close.  This could keep our pending percentage up artificially high. 

Tune in next week for an update on the number of sales in South Santa Clara County!

Several times in the past (July, 2008 and October, 2008) I have written about Morgan Hill’s City Manager speaking at our Wednesday morning South County Realtors Association meetings.  Ed Tewes does an excellent job on updating us on the current issues affecting Morgan Hill and environs.  As would be predicted, the number one topic was how Morgan Hill is braced to handle the existing economic recession.

 Mr. Tewes began with the good news.  Although the Santa Clara Valley Water District had been on the brink of enforcing mandatory water conservation, it appears that we may escape that restriction as the latest rainfall brings us much closer to the seasonal normal amount.  However, that doesn’t allow us to water with impunity, don’t forget.

One of the questions that the city is mulling over that is of interest to many citizens is whether there should be a movie theater downtown.  We have an excellent multi-plex at Tennant Station that should serve the city’s needs.  The City Council is considering a downtown cinema, but not at the old Granada Theater site.  The new structure would be at the corner of 2nd Street and Monterey Road.  My personal opinion is that we shouldn’t stretch our entertainment dollars too thin and shouldn’t over-leverage our tax dollars by constructing a new theater downtown.

The City Manager’s brief presentation then focused on the four areas the City Council was currently considering:

• Capturing new regional economic growth:  be prepared to attract future growth by investing in our infrastructure and redevelopment
• Focus on the downtown corridor:  subsidize growth and use redevelopment monies
• City Council workings:  should all council-members participate in policy workshops rather than sub-committees?
• Ongoing economic issues:  how should the city deal with the revenue reduction due to no development fees, lower property taxes, transfer taxes, and sales taxes

The City Manager stated an interesting fact regarding development fees and why there were currently none being collected.  For the past 6 months, there have been no new construction building permits pulled in Morgan Hill.  This is a record.  (As an aside, previously I was a civil engineer and was the Morgan Hill plan check engineer for a brief period.  Although I’m sure there are currently tenant improvement permits, remodel permits, and a host of other types of building permits being applied for, it’s hard to fathom no new construction permits.)

The last topic Mr. Tewes covered is how Morgan Hill was handling the economic crisis.  There have been staff layoffs and compensation reduction.  An interesting turn of events is that the City of Morgan Hill and the City of Gilroy are meeting to discuss ways to share costs and services.  The cities will be considering regional fire and police protection as well as shared environmental and recreation programs.

Our regular office meeting/new office listings tour took place this morning.  The meeting portion was very informative with a guest speaker discussing the current state of acquiring a loan modification.  He claims to have a 90% success rate in obtaining a loan modification for those who pass his initial filtering criteria.  A description of that criteria is to be forthcoming via an email from the speaker, and when I receive it, I will share it with you.

After our meeting we all toured the two new real estate listings featured this morning.  The first new listing is located at 2420 Fountain Oaks Drive in Morgan Hill.  This is a 1,382 sq.ft. 3 bedroom/2bathroom home on a 6,970 sq.ft. lot.  This home is aggressively priced at $525,000.

This home has a lot of unique features to offer such as an artist’s studio in the backyard and a complete separate kitchen inside (the sellers were caterers).  Both kitchens have granite countertops.  All bathrooms have been remodeled.

The second home on tour, 16595 Rustling Oak Lane in Morgan Hill, is a listing of mine.  This beautifully remodeled home is priced at $899,000 and is located in the Jackson Oaks Homeowners Association (annual dues = $375).

This is a 2700 sq.ft. home with 4 bedrooms and 3 bathrooms on a 16,117 sq.ft. lot.  There are many unique, striking features to this home in a addition to a lovely remodeled kitchen and great room with gorgeous views of the valley and mountains beyond.  I will write an additional post on this real estate listing soon.

The number of residential sales increased again this week in the south Santa Clara County towns of Morgan Hill, San Martin and Gilroy, but 71% of the sales were for real estate priced below $500,000.  Last week there were 41 residences that went from active to pending status.  Of these, 33 were single family homes and 8 were townhouses/condominiums.  This is the largest number of condo sales in one week in our area since I began writing this weekly post.

The large number of residential sales last week isn’t surprising considering that we currently have the trifecta of historically low mortgage interest rates for loans under $625,500, very low real estate prices for south county, and many active real estate listings for buyers to choose from.

Of these sales, the list price ranges were:

Below $200,000 = 2 sales (5% of total)

$200,000 - $500,000 = 29 sales (71% of total)

$500,000 - $800,000 = 9 sales (22% of total)

$800,000 - $1,200,000 = 0 sales

$1,200,000 - $2,000,000 = 1 sale (2% of total)

As of January 18, 2009, there are 595 residential (single family homes and condos) listings active on the market in Morgan Hill, San Martin and Gilroy.  There are currently 227 pending residential listings.  Therefore, 28% of the total listings are pending under contract as of this date.  Many of the pendings are short sales and therefore take a long time to close.  This could keep our pending percentage up artificially high. 

Tune in next week for an update on the number of sales in South Santa Clara County!

Our January 14, 2009 meeting of the south Santa Clara County Realtors in Morgan Hill included many new real estate listing announcements, several price reductions advertised and 17 sales for the week announced by the Realtors in attendance.  I always try to attend these weekly meetings so that I can be informed on new listings that haven’t yet been submitted to the multiple listing service and to mix and mingle with the other Realtors.  It is a benefit to my clients that I know so many of the local Realtors personally because it is a definite advantage when negotiating a contract with them.

One home was on tour this morning, 2193 Windemere Court in Morgan Hill.  The list price is $3,150,000.

This gated estate is a total of 7,783 sq.ft. on a 2.47 flat acre lot located on the eastern edge of the valley.  The main house has 6 bedrooms and 4 1/2 bathrooms and the attached guest house has 1 master bedroom, 3 bathrooms and a pool house below with a full, remodeled kitchen.  The backyard looks wonderful for entertaining with a unique pool and outdoor kitchen.  In addition there is a vineyard, wine cellar and 6-car garage.

I viewed this home when it was on the market in 2004 and it sold for $1,900,000 at that time.  The current owners have greatly improved the condition since then and according to the listing agents, they have put in $500,000 worth of upgrades.  However, I feel that the price needs to be more in the middle $2 million range in order to attract a buyer.

The South County Realtors Association welcomed Realtors and affiliates back from a two week break with a robust meeting and a great turnout.  Over 25 real estate sales were announced and many of those sales were multiple-offer situations.  There were two sales announced that were priced over $2 million.  A lot of new real estate listings were also announced as well as changes to existing listings - lots of price reductions.

Three Morgan Hill real estate listings were on tour this morning:  408 Scotts Bluff Place ($978,000), 15750 Casino Real ($700,000) and 820 Mercedes Drive ($724,900).

820 Mercedes Drive is a well-priced 6 year-old single story home with 4 bedrooms and 2 1/2 bathrooms.  The home is 2727 sq.ft. and it is situated on a 7841 sq.ft. lot.  It is a lovely home with a nice floorplan, gated front courtyard, 3 car garage and a backyard with a very nice built-in barbecue, fireplace and patio area.  Although the backyard is small, it looks to be very low maintenance (which is sounding better and better to me these days!)

820 Mercedes Drive sold for $1,049,000 in May of 2006.  Please contact me if you have any further questions about this or any other listing.

   I’ve had several clients and friends recently ask me just what, exactly, have home prices been doing in south Santa Clara County since they peaked.  And, by the way, just when did they peak?  To answer that question, I turned to MLSListings Pro where Realtors go to look at the Multiple Listing Service.

Here’s what I found for Morgan Hill:  Morgan Hill’s average home sale price peaked in September, 2006 at $1,091,144.  The average sale price for the year of 2006 was $945,240.  The average sold home price in 2007 didn’t dip too drastically, but did fall 5% to $901,582.  Our most recent data for 2008 through the third quarter shows an average sale price of $767,900.

For Morgan Hill, that is a total drop in average home sale prices from the year of 2006 to the end of the third quarter in 2008 of 19%.

And for Gilroy, the statistics look a little gloomier:  Gilroy’s average home sale price peaked in the year 2006 with an overall average sale price for single family homes of $800,620 for that year.  The average sale price for a Gilroy home in 2007 barely moved from the previous year and was $796,676.  But through the third quarter of this year, the average sale price for 2008 is $565,278.

For Gilroy, that is a total drop in average home sale prices from the year of 2006 to the end of the third quarter in 2008 of 30%.

Gilroy has been particularly hard hit with foreclosures and short sales and those “distressed” listings seem to be what is selling there, so of course, that will drag down the average sale price for the city.  If you live in Gilroy and you want to know how much your home may be worth now, don’t just automatically take 30% off what you think your house was worth in 2006.  Each house is still valued individually and there are many factors that make up its worth.  Call me for a thorough, in-depth market analysis if you are considering selling your home.

Sales were basically on par with the week before in the south Santa Clara County area of Morgan Hill, San Martin and Gilroy.  There were 29 residences that went from active to pending status.  Of these, 28 were single family homes and 1 was a townhouse. 

Of these sales, the list price ranges were:

$200,000 - $500,000 = 20 sales (69% of total)

$500,000 - $800,000 = 6 sales (21% of total)

$800,000 - $1,200,000 = 2 sales (7% of total)

$1,200,000 - $2,000,000 = 1 sale (3% of total)

As of November 11, 2008, there are 730 residential listings active on the market in the Morgan Hill, San Martin, Gilroy area, and 216 pending residential listings.  Therefore, 23% of the listings are pending under contract as of this date.  This percentage is down slightly from the past few months.

Tune in next week for an update on the number of sales in South Santa Clara County!

Sales weren’t quite as robust this past week in the south Santa Clara County area of Morgan Hill, San Martin and Gilroy.  There were 30 residences that went from active to pending status.  Of these, 28 were single family homes and 2 were condo/townhouses. 

Of these sales, the list price ranges were:

Below $200,000 = 1 sale (3% of total)

$200,000 - $500,000 = 21 sales (70% of total)

$500,000 - $800,000 = 5 sales (17% of total)

$800,000 - $1,200,000 = 2 sales (7% of total)

$1,200,000 - $2,000,000 = 1 sale (3% of total)

As of November 4, 2008, there are 732 residential listings active on the market in the Morgan Hill, San Martin, Gilroy area, and 231 pending residential listings.  Therefore, 24% of the listings are pending under contract as of this date.

Tune in next week for an update on the number of sales in South Santa Clara County!

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Gretchen Merrick, CRS, GRI Phone:408-892-9015 DRE#:01317499 Intero Real Estate Services gmerrick@interorealestate.com Featured Listings 16868 De Witt Ave Morgan Hill, CA 6 BR | 4.50 BA $849,999 More Details 1845 Silverwings Ct Morgan Hill, CA 4 BR | 3 BA $1,025,000 More Details

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