This area took a big decline in prices more than the San Jose Area. If the home is on the market for a while it maybe a short sell or a home for this market in Morgan Hill and Gilroy over priced. It is unfortunate some of the homes that sold for $1,000,000+ are selling in the 600K-800K price range. If.. the short sell is approved with an offer it will take 45 days upto a year to close IF the buyer sticks with the offer and the bank does not foreclose. If the bank took back the property they are selling at reduced prices. With that said these prices are now the market for this area, there is just to so many of them and not enough normal sells to get the higher pricing. The homes have to appraise of homes that SOLD with in 3-6 months.
The home owners that are selling their homes at "Normal prices" are taking a shock and hoping a buyer will go for the regular purchase. The bank owned and short sell prices are the market unfortunately for them. But the bottom line this area will take awhile to come back if at all or near the 2003-2007 prices. The homes near the foothills near the park are selling for a bit more, but still taking a big bite. It is a good time to purchase but just like the rest of the world we do not have a crystal ball and really do not know how long this market will continue. We are witnessing a plateau in some areas and most likely Morgan Hill and Gilroy will keep to the current asking and selling prices they are currently at. I don't see them going down, we can only hope this is it and we are done with the down ward spiral.
I hope this helps. If you are not working with a Realtor you should interview a few, there are several on this site that would be more than happy to work with you including myself~
Denise A. Szyszlo Realtor
Office:: (408) 369-2000 x319
Mobile: (408) 768-7097
Fax: (888) 334-0888
419 E. Hamilton Ave, Campbell, CA 95008