August 27, 2008

Great starter home in Gilroy

Coldwell Banker Residential Brokerage presents
Gilroy, CA, 95020 offered at $249,900

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Bedrooms: 3 Bathrooms: 1 Full
Apprx. Sq. Feet: 1123 Year Built: 1972
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Great Starter Home. Large Corner Lot with access to Backyard from Street. Walking Distance to Neighborhood Park. Vaulted Ceiling and Fireplace in Living Room. Covered Patio off Kitchen. Conveniently located to shopping centers and Easy Access to Highway 101. Lots of Potential.

Even though we all know that Gilroy is no longer part of the Real Bay Area (if even the Bay Area itself!), Burbed doesn’t really feature it so often.

That said, Burbed reader Jackie did find this great starter home. Wow what a beaut!

To all you RE investors – is now the hot time to buy here? Will Gilroy be the next Foster City? What appreciation should we expect?

Comments (37) -- Posted by: burbed @ 5:59 am

37 Responses to “Great starter home in Gilroy”

  1. bob Says:

    Why yes, this is the type of investor home that I like to buy. You could rent this easily for $3,000 a month because I’ve heard renters will fall over each other to rent it from you. All you’d have to do is spend $200 on spray paint, slap it on and wallah! instant equity! In fact, I’m thinking that I should take all of my retirement money out and buy this instead. Didn’t ya’ll hear the report? Sales were UP in 20 major metros! Bubble… here we come! hu=hu-hu-hhh( elmer fudd laugh)

  2. rick Says:

    I have no idea why RBA “potential” investors are insisting on waiting for better opportunity (what? you already think that RBA prices will not fall, there is no better opportunity for you other than NOW) in RBA while this kind of cash flow positive gem is just lying around waiting to be collected. What’s your problem with money?

  3. bob Says:

    You know what Rick? I was thinking the exact same thing. In fact, I was thinking that I aught to just quit my job and go into real estate investment full time. The US economy will never recover and the dollar is worthless. So I’m gonna’ invest in gold, platinum, and houses. I think all Americans should stop working and buy houses instead.

    Besides, I’ve heard that foreigners with suitcase loads of cash from China, the Dominican Republic, Paraguay, Vietnam, and Russia have a problem of not knowing what to do with all that excess money. I hear they’re looking to buy houses all over the US because our homes are so cheap to them. That way we can just sit back and sell all our houses to them and live the good life!!

  4. WillowGlenner Says:

    there is no vibrant rental market in Gilroy so this is not a good investment.

  5. sonarrat Says:

    Not a terrible area. It’s on a corner lot facing a row of newer McMansions on Church Street. And it appears to already be off the market, so someone must have thought it was a good value. IMO there are too many newer properties at reasonable prices in Gilroy to consider something like this.

  6. Lionel Says:

    From calculatedrisk —

    And prices are now falling for luxury homes too:

    [E]ven luxury homes are now showing weakness. … That “prestige homes” index found that in the second quarter this year, values on many such houses in San Diego dropped 2 percent from the first quarter and 7.8 percent from second quarter 2007. The average price among those homes has fallen to $2.02 million, from a peak of $2.19 million in the second quarter 2007.

    No area is immune. The housing bust is now moving up the price chain.

  7. Roxboy Says:

    What better place to live than to wake up every morning to the smell of garlic in the air, then you drive 50 miles to work in the Real BayArea, and have a cup of coffee thinking how wonderful it would be if garlic coffee is an option.

  8. bob Says:

    Well… They do make Garlic Ice cream…

  9. DensityDuck Says:

    My God, that’s not a house, that’s a garage with a lean-to on the side!

  10. anon Says:

    Gosh, you guys really are picky! Is no home good enough for you?!

  11. DreamT Says:

    Garlic coffee every morning, now that’s a thought…

  12. Gavin Says:

    Craigslist appears to show the rents for 3 bedroom in Gilroy are about $2000 per month.

    At this rent, the property could be an OK rental.

    Will it rent for $2000 per month?

  13. cardinal2007 Says:

    Most of those houses seem to be much nicer than this house, I don’t know what the rent would be in that case.

  14. nomadic Says:

    Lionel feast your eyes on this – there’s a glut of super-expensive spec homes on the market now too:

  15. bob Says:

    I read an interesting article today. Kind of interesting that the only reason sales are up is because the only thing selling is foreclosures, and since these are the only things selling, they help self-destruct even the price of future foreclosures as well as help stave off sales of actual median priced homes, which in turn drives their prices down as well. It’s a self-sufficient money eroding machine. Latest “guesses” are that the foreclosure market might bottom out in mid-2009. I think that’s a bit early considering Alt-A resets in 2010.

  16. sonarrat Says:

    I think now this will be just as long and ugly as the S&L mess, and we may see a sea change in what types of companies write mortgages, as we did in the S&L era, as banks continue to scare themselves out of the market.

  17. DreamT Says:

    Bob – “(…)since these are the only things selling”
    Quote please? I read different statistics – about 1/3 of what sells in the San Jose area are foreclosures. One of us is wrong, and I bet it’s you.

  18. Lionel Says:

    Apparently that foreclosure number doesn’t include short sales —

    “So much of today’s market is driven by distress. Unless interpreted in that context, the stats give a rather distorted view of the overall market. We know one-third of the Bay Area’s resales in July were homes fresh off foreclosure. Who knows how many more involved a desperate seller and a lender who accepted a short sale,” said John Walsh, MDA DataQuick president.

  19. Lionel Says:

    And thanks for the link, nomadic, that’s quite a flip: 139 million. Wow.

    More interesting stats from Calculatedrisk that should directly impact the RBA –

    From the WSJ: Delinquencies, Losses Continue to Rise On Loans Backing Residential MBS

    Delinquencies and losses on pools of loans backing U.S. residential mortgage-backed securities issued in 2006 and 2007 continued to weaken through the first half of the year, according to Moody’s Investors Service. … Deals backed by subprime, Alt-A and jumbo loans have all weakened compared with prior years. … The agency is now reviewing for potential downgrade all jumbo transactions originated in 2006 and 2007.

    Alt-A and Jumbo; the new subprime. Also the article describes the outlook for HELOC pools as “daunting”.

  20. madhaus Says:

    I mentioned this article in another thread but really want to call it to everyone’s attention. This article in IHB shows the decline in Irvine, and also adds in the author’s previous price drop forecast. Amazingly, prices dropped even MORE than he predicted. For those of you who say that Irvine is not like the RBA, remember their schools score just as well as Cupertino and Palo Alto (I checked). The biggest difference is they have much newer housing stock, lots are very small, and most places have Mello-Roos taxes for 40 years, payable monthly.

    Going back to today’s lucky featured property, really now, GILROY? You might make some money on this place if you can count on our auto manufacturers coming up with another way to run them besides gasoline. Mmmm, garlic coffee!

  21. Ross Says:

    According to Zillow, this property “sold” (foreclosed) on 6/18/08 for $329K, after selling in 2006 for $565K. So the $250K asking price is a whopping 56% decline in value from peak. In addition to being a $80K haircut for some lender. Also from the Google Street view, it appears to be 1/2 of a former duplex.

  22. Shabba Says:

    Check this out (3,600/sqft!):

    I don’t know if this is some kind of freaking typo or what. If it isn’t these people are out of their friggin mind. 173 Barroihlet Ave, San Mateo, CA.

  23. madhaus Says:

    Shabba that isn’t a typo, it’s similarly priced on redfin as well. For once the Zestimate is way lower than the wishing price.

    Hey, it may not be bargain-basement priced, but at least it has a basement.

  24. Shabba Says:

    Well then, that’s at least double and more like triple the average real estate idiocy around here. Unbelievable. Most overpriced house I have ever seen. I just read in the SF Chronicle that home prices are down 40% state wide in the last year. WTF is going on? It’s gotta be a typo, no one in their right mind would price it like that in this climate. Here is the article.

  25. WillowGlenner Says:

    Madhaus did you really say this? Come on. Are you predicting that IRVINE is going to overtake silicon valley as the VC capital of the world?

    I understand schools are important to you, but schools ARE NOT the reason real estate is expensive here!

    For those of you who say that Irvine is not like the RBA, remember their schools score just as well as Cupertino and Palo Alto (I checked). The biggest difference is they have much newer housing stock, lots are very small, and most places have Mello-Roos taxes for 40 years, payable monthly.

  26. WillowGlenner Says:

    That house on Barroilhet in San Mateo has not updated the square footage since the teardown, that is the problem. They tore down an 800 sq ft place and are putting in a 3000K sq ft place, it looks like. Still seems overpriced by about 800K, but we have new construction like that going for $2 million in Willow Glen.

  27. whocares Says:

    Starter home, huh? What exactly is being started? A lifetime of bad financial decisions?

    If it were in the bay area, it may qualify as starter home, but in Gilroy, the starter homes are are the mcmansions. Too bad.

  28. madhaus Says:

    WG, Irvine was a premium OC community and it’s collapsing under its own weight due to a combination of things. Too many people were involved in the Real Estate biz and those jobs are toast. Too many people with negative equity in their properties. Too many foreclosures. Too many people who drank the HELOC Kool-Aid again and again.

    But to insist that none of this will affect us here is willful blindness.

  29. nomadic Says:

    whocares says: Starter home, huh? What exactly is being started? A lifetime of bad financial decisions?

    I think you nailed it with that statement! LOL

    If you go to the site specifically for the house shabba posted, you’ll see it’s 3200sf. “Just” $905/sf – for San Mateo. Huh. Don’t think it’s gonna sell.

    madhaus, I don’t think we’ll be hurting as bad as Irvine because many, many of their jobs disappeared with the housing bust and because there was a lot of new construction over the last few years down there. I’d say it’s a vast oversimplification to say that anyone here is denying it will affect us because it already has and probably will continue to for another year or so.

  30. rick Says:

    Well, I admit that Irvine probably has affected us, or even RBA, but have they affected the few blocks our RE investors own? NOT!

  31. whocares Says:

    Part of the reason people think that property isn’t declining is because these are still being listed so high. It’ll come around.

  32. whocares Says:

    I’d like to start a game. Anyone interested? Just for fun I’d like to hear what you all think are the funniest things RE brokers say and create a dictionary. I’ll start. Bonus points will be awarded for the worst negative turned into the most preposterous positive!

    “unlock your stored equity” = “Overextend yourself on a new home giving me the largest commission possible”
    Lots of potential. = Dump
    Investment opportunity = Major Dump? heh?!
    Close to transportation = Train/highway/bus runs through backyard
    charmer = dilapidated
    starter home = POS
    quaint = TINY

    So, which is worse an investment opportunity or ‘potential’?

    Before you guys rail me for equating starter home with POS… I’d like to say that if a home is labeled as a starter home on an advertisement which is supposed to outline the good qualities of the home, it states from the get-go: “hopefully your expectations are low!” If it wasn’t the case, they wouldn’t state that it was a starter home.

  33. whocares Says:

    I can’t resist but to play my own game:

    mature vegetable gardens = “I, the RE broker, am scraping the bottom of the barrel for something good to say”
    manicured lawn = I got nothin
    not a short sale = WE ARE STILL WISHING
    cute = quaint charmer (see above)
    Rare opportunity = please do not look at the comps priced significantly less
    still accepting offers = waiting for a bigger sucker
    “as is” = foundation is fucked.
    Affordable housing = worst house on the block
    day care cleared by fire department = uh…. hm.. (little help? lol)
    dual paned windows = OUTSIDE IS LOUD

    Ok, so what means “on superfund site”???

  34. Pralay Says:

    “Won’t stay in market for long” = “We hope someone will make an offer someday.”

    “Handyman’s special” = “The house can crumble anytime”

    “Recently remodeled and upgraded” = “Could not sell four months back. Hopefully it will sell this time.”

    “Dual pane window” = “Close to freeway. Lots of noise.”

    “Well worth $$” = “Please buy it”

    “Must see” = “Don’t be deceived by location or bad look. Come to open house anyway.”

    “Priced to sell” = “Unlike 2004-2005, we did not price this home $50 more than the last sold comp.”

  35. Pralay Says:

    And lastly,

    “Motivated seller” = “Owner got f**ked pretty well. Now wants to get out.”

  36. Pralay Says:

    Ok, so what means “on superfund site”???

    “If you buy it, your children can get cancer.”

  37. sonarrat Says:

    “Up and coming” = you’ll dodge bullets
    “Family neighborhood” = the Norteno family, you’ll dodge lots of bullets
    “Do not disturb tenants” = the property will be destroyed when they’re evicted
    “Close to shops” = backed up to a strip mall
    “Large lot” = if you’re used to living in Tokyo

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