Teachers Ralph and Kaitlin Fullerton were living in a one-bedroom condo in San Jose and desperately seeking an upgrade.
The married couple hoped to start a family and searched all over Santa Clara County. They found some properties to their liking, but “we were striking out everywhere, and being outbid by cash offers well over asking price,” Kaitlin recalled.
That’s when a real estate advertisement for the Monterey Collection development – a quaint cluster of single family dwellings and townhomes situated on the corner lot of East Dunne Avenue and Church Street – popped up on Kaitlin’s computer screen. She persuaded her husband to take a drive to Morgan Hill, a town the couple was familiar with since they had friends already living here.
“His initial thought was it was too good to be true,” recalled Kaitlin. “Brand new and in our price range, what was the catch?”
The couple “fell in love” with the location and the fact that buyers had the ability to “customize the home to our likes and budget,” she continued. So Ralph, 29, who was raised in South San Jose, and Kaitlin, 26, raised in Sunnyvale, took the plunge. The couple moved into their three-bedroom, 2 1/2-bath townhome, plus a loft, for just under $500,000 in June.
“Morgan Hill just offers such a tremendous lifestyle,” said Adam Lubow, sales manager at the Monterey Collection, who sold his first unit in late May, closed on nine homes in the last week of June and has 22 family units currently occupied. “[City Ventures] focus on highly desirable areas … [and] we’re committed to Morgan Hill.”
The Monterey Collection, one of several developments in town built by San Francisco-based City Ventures, boasts eight single-family homes facing Church Street, along with 35 townhouses surrounding a communal courtyard area. The developers offer four different architectural designs – Spanish, Craftsman, Monterey and Traditional – as well as 16 different facades or elevations. Prices range from $489,990 for a three-bedroom, 2 1/2-bath townhome with a loft to $684,990 for a four-bedroom, 2 1/2-bath patio home with a loft.
More and more, Morgan Hill is becoming the desired destination for all types from married couples like the Fullertons to single professionals seeking solace from city life to seniors wanting a friendly environment for retirement.
The recent uptick in a mixed bag of developments – townhouse communities, senior apartment complexes and single family homes expanding existing neighborhoods – mark a sweeping trend in Morgan Hill. As Silicon Valley’s bedroom community to the south, Morgan Hill is especially appealing for young married couples and retired seniors. The attractions: more living space, more bang for one’s buck and a respite for tired house hunters sick of widespread bidding wars in cities like Mountain View, Sunnyvale and Campbell.
“The numbers are clear that we’re building more now than we will in the future and have in the past,” said Community Development Director Andrew Crabtree. From 2009-2011, the City approved permits for 226 single-family units compared to 246 single-family and 177 multi-family units in 2012 alone.
Listing agent Scott Murray for Intero Real Estate, who has been selling and developing properties for 27 years, estimated that approximately 70 percent of new home buyers are from out of town. The remaining 30 percent are upgrading.
“Right now, we have a lot of flexibility and product from entry level [townhomes] up to executive homes,” said Murray, who has sold 15 homes as the listing agent for Villas of San Marcos off Butterfield in a 12-month span. “Right now, there’s not a lot of standing inventory.”
In fact, Murray has only seven remaining single family detached houses out of an original 42 currently for sale.
The Fullertons, for example, were pleasantly surprised that – unlike their previous house-hunting experiences – there was no bidding war.
“We just put in the deposit, easy!” Kaitlin explained.
Additionally, the thriving Morgan Hill downtown filled with trendy restaurants for all different appetites and the CalTrain Station/Santa Clara Valley Transportation Authority commuter lot are draws for those who work in Silicon Valley and the Bay Area.
“I love how close we are to downtown. We always walk to the farmers’ market and to restaurants,” noted Kaitlin.
Murray noted that house prices in Morgan Hill aren’t that different than San Jose, “but you get more house and community amenities. That’s attractive to young families.”
He classified new properties into three groups. (1) Townhomes, which are growing in popularity and begin in the $500,000 price range; (2) attached duets, which are two single family homes that share one common wall, typically starting at $600,000; and (3) single family detached homes, usually 2,200 to 2,600 square feet, at $700,000.
“Morgan Hill is a very easy sell once people take the time to spend a half day here,” explained Murray, who noted that his buyers are “family-oriented” and enjoy the outdoors. “People move here because they want a little more space, and they get it.”
A little more space was another big draw for the Fullertons.
“Now that we are fully settled I’m so glad we picked Morgan Hill. It’s not as crowded as San Jose,” said Kaitlin.
Crowded is a term not traditionally associated with Morgan Hill, a rural community of about 39,000. Some residents, however, are wary of the recent explosion of housing developments around downtown, especially up and down Butterfield Boulevard and other more subtle nooks in existing east-side neighborhoods.
Mayor Steve Tate, however, pointed to the growth control ordinance established in 1977 that “dictates that our population will not exceed 48,000 in year 2020.”
“We are going to continue to grow because we do have the space to grow, and, if we don’t grow, the alternative is not very good,” Tate said. But “we always have the goal to preserve the small town feel and quaint atmosphere [in Morgan Hill.]”
Crabtree explained the City does put a cap on the number of residential units allowed to be built each year. That number is currently capped at 270.
In 2013, the City issued building permits for 244 single family units and four secondary dwelling units. In 2012, there were 246 for single-family, 177 multi-family units and eight secondary dwelling units.
He noted that permits issued in previous years have carried over with extensions and are now in various stages of construction as developers gain the adequate financing.
Crabtree added that “a lot of the projects are on the bigger streets… at more visual locations.”
He said residents are taking notice of the building activity due to the delayed starts of some developments, coupled with newly approved or completed ones such as the Monterey Collection.
Butterfield Boulevard, which cuts through the middle of town from Cochrane Avenue past Tennant Avenue and extends through to Watsonville Road, is the epicenter for new developments. It’s hard to miss the countless housing advertisement signs such as the Butterfield Townhouses off Diana Avenue near the South County Courthouse and the Lodge at Morgan Hill Senior Apartments complex under construction on Barrett Avenue.
Senior developments, which offer lower monthly rental costs for tenants 55 and older, are also sprouting up around town. Besides the Lodge – the massive structure under construction just north of Tennant Avenue – there is the recently completed Bella Terra complex on East Dunne, as well as the Horizons At Morgan Hill complex on McLaughlin Avenue north of Main Street.
“We think [the new housing developments] will have quite a positive economic impact,” said Tate, noting that the proximity of the housing to the downtown will be a financial boost the City has been planning on for years.
Just up the block from the Horizons, across Central Avenue, developers quickly constructed earlier this year a cluster of single-family homes that sold just as fast as they were built. Across Monterey Road and down Wright Avenue on Oak Grove Court, a set of 15 new single-family homes were constructed and are at full capacity.
Lubow said City Ventures has two more investments in Morgan Hill, including the property on the corner of Main and Butterfield right next to the VTA station.
“We build in locations that are highly desirable, in and around the downtown,” Lubow said.
