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What does $1 million get you these days in Morgan Hill? If you’re a prospective home buyer, not much. Case in point: a two-bedroom, one-bathroom, 832-square-foot home on 1.5 acres at 185 Sanchez Drive. The modest home has an $899,950 price tag, according to Trulia.com. Described as a “great development opportunity” the knocker-downer on the city’s west side serves as a prime example of skyrocketing home prices.
“Sometimes an owner is adamant about a price, and no matter what you say, they want that money,” said Morgan Hill Coldwell Banker real estate agent Jim Leslie.
The high cost of area homes may seem intoxicating to local sellers, but Leslie warns that by overpricing a property, owners may be shorting themselves in the end. After putting a home on the market, the first 30 days are crucial when finding a buyer. The highest price the owner wants to get and the lowest price they can accept without losing money together form a bracket. The sale price between the high and low points of the bracket is determined by who wants to buy the property and how much the owner will accept.
“If you’re above that bracket, the house may sit on the market for too long and accrue days on the market before an obvious price reduction needs to be done,” Leslie said. “It can fall back within that bracket and crash. That’s the risk that you run.”
Even with an asking price of $899,950, the property on Sanchez Drive, owned by Domingo Mendoza and listed by Real Estate Solutions, is still almost $100,000 less than the median price for homes in Morgan Hill. That median is $984,480, according to Zillow. With a robust Bay Area economy still booming, the dream of home ownership for many in Morgan Hill may seem impossible.
“Typically, unless you make about $250,000 to $300,000, or have a dual income,” Leslie said, home ownership is hard to come by. “In Morgan Hill, the price of homes has risen 22 percent in 12 months.”
So what will $1 million get you in the rest of the country?
Deep in the heart of Texas, where bigger is better, football is still king and the economy is booming, $1 million for housing goes a little further than it does here in Morgan Hill. In Dallas, a five-bedroom, five-bath, 7,933-square-foot home on Bent Tree Hill Drive is listed at $990,000.
“Enter this beauty through lovely courtyards,” reads the home’s description on Trulia. “Stately five-bedroom custom home on over half an acre. Beautiful private backyard with pool and pool house. Large ballroom-style formals greet you at the entrance. A chef’s dream in this oversized kitchen complete with granite and stainless appliances.”
In Columbus, Ohio, home of the Ohio State Buckeyes, a stately four-bedroom, five-bath home on Scioto Estates Courts on a wooded lot is listed at $995,000.
It could be worse for home buyers in the South Bay. In Los Gatos, the median price for a house is $2.065 million, according to Zillow. In Campbell, the median price is about $1.5 million, and in Palo Alto, about $3.3 million. South of Morgan Hill, the price comes down to $799,800. For Leslie, Hollister and San Juan Bautista, where the median home prices are $504,600 and $603,600, respectively, are where a home buyer can find a deal.
“The most reasonable places are Hollister and San Juan Bautista,” Leslie said. “San Juan Bautista is close to Highway 101, but you don’t get the noise from the highway. It’s a nice community, and it’s overlooked. For whatever reason, it hasn’t taken off yet.”
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