The Morgan Hill real estate market, found in the Silicon Valley section of the Bay Area, is facing a mixed prognosis during the second half of the fiscal year. Local experts seem to be seeing some signs of improvement, although financial difficulties and reluctant banks have compounded problems started by the foreclosure and mortgage crises. An August 2, 2010 piece from the Silicon Valley Community Newspapers stated that “In mid-July, as interest rates reached historic lows, Mortgage Bankers Association reported mortgage applications jumped as demand for home purchase loans rose for the first time in five weeks and demand for home refinancing loans reached their highest level in 14 months. The four-week moving average of mortgage applications increased 4.9 percent, and the industry group's index of refinancing applications was up 8.6 percent. Jumbo loans are getting cheaper and easier to obtain these days. Banks report over the last two months, the number of applications and funding for jumbos rose anywhere between 10 percent to 30 percent…On the other hand, doom-sayers point out that new home sales year-over-year fell 16.7 percent in June and that the June sales pace is the second slowest ever on record since 1963, when the commerce department began tracking the information. Also in June, new home construction fell 5 percent from the previous month and on a year-over-year basis, housing starts were down 5.8 percent.”
Recently, fewer Morgan Hill homes for sale are the product of bank auctions and san Jose foreclosures. This is because of a complex deadlock between delinquent homeowners and banks overloaded with foreclosed properties. According to an August 5, 2010 article from the San Jose Mercury News, “Foreclosure is certainly taking longer than it used to. According to figures from ForeclosureRadar, for the California homes that were foreclosed on in June, it took an average of 234 days from the "notice of default" to the time the property was foreclosed. That's nearly eight months on average - meaning some homeowners stay in their homes much longer. In January 2007, the average time to foreclose was a little more than four months. New state laws have built more time into the foreclosure process, adding a requirement that lenders try to contact borrowers in person before they are allowed to file a notice of default, for example. Between legislated timelines, delays because lenders are swamped with loan modification cases, and possible strategic delays on the part of banks, many homeowners can stay put, payment-free, for months on end.”