So often people ask me – how’s the real estate market? San Lorenzo Valley Real Estate prices rose 6% during the 3rd quarter*, compared to the 2nd quarter. 102 homes sold on the MLS between July 1st and September 30th, at an average price of $459,503. The 87 acre Johnson ranch in Boulder Creek fetched $2.25 Million; while a red-tagged home with severe erosion issues sold for $50,000. *Excluding the two outliers from my calculations, the average price was $445,693*, up an astonishing 30% from the same period last year.
My outlook for fall and winter is for a stable market – the above gains are not sustainable, and we’ve just emerged from a potentially disastrous government crisis. Even though government went back to work, the projected economic cost of those two weeks is predicted by economists to be about $20 Billion dollars. Consumer sentiment fell to a 9 month low. There’s a backlog in refinancing and home purchase loans. The only bright light is the Federal Reserve decided to keep their policy easy to support the economy. Although most of this year the market has favored sellers, perhaps the next few months will be a good opportunity for buyers. Click here if you’d like help finding your dream Santa Cruz Mountains property.
This last quarter, I’ve worked with 4 buyers on distressed property purchases: 2 short sales and 2 foreclosures. The challenges are often condition – short sellers have lost all their original equity and don’t have money for repairs. Bank sellers have no idea what’s wrong with their properties, until buyers’ inspections reveal defects. In my clients’ cases, both bank owned properties had failed septic systems. We were able to negotiate either having the seller pay for buyers closing costs, and/or reducing the prices to offset the buyers’ costs for these expensive repairs.
One client that I represented on their short sale got 9 offers, many significantly over asking price! – unfortunately still not high enough for the sellers to recoup any money. The offers came in during the month of February, and the closing occurred in July. This 6 month time frame is about typical for short sales, although I’m representing a buyer now where the timeframe should end up at about 4 months.
Also this quarter, one of my clients needed to sell their home in San Jose quickly, in order for the seller of the home they wanted to buy in Boulder Creek to accept their offer. Despite a tight timeline plus their vacation, I was able to help them achieve their dream of moving from a home where they could hear their neighbors’ TV to a home twice the size on 10 sunny, end-of-the-road acres.
This past quarter, 15 % of homes went pending sale within 7 days of being listed on the MLS, compared to 12% in the 2nd quarter and 22% in the first quarter. Considering the market as a whole, homes went into escrow on average within 57 days of being listed. The average days on market was 69 days during the first quarter. SLV already turned in a great second quarter 2013 – 78 homes sold at an average price of $420,858, up 18% over the same period last year (66 homes sold at an average price of $355,435 in 2012).
There simply aren’t enough homes for sale in the San Lorenzo Valley The chart below shows we’ve just 3.5 months of inventory – meaning we’re still in a seller’s market.
Competition amongst buyers is what has forced home prices higher. While some sellers hope to wait for higher prices, but if interest rates continue to rise, that just might dampen future price increases.
If you have been thinking about selling your house, there’s still pent up demand. I just put a property back on the market. I updated everything I could find all across the internet and contacted everyone who’d called about it as well as all the agents who’d shown it. Although the previous escrow fell through after the buyers’ inspections – the seller now has multiple offers to consider – again. Even if you have a distressed property to sell, don’t worry – about 40% of my transactions this year were short sales.
Click here to find out what your San Lorenzo Valley home is worth now, or call MC Dwyer, Century 21 Showcase REALTORs at (831) 419-9759.
Distressed sales continue to decline as a percentage of overall sales to 21.5%, compared to 25% earlier this year. However, of homes priced under $400,000, 19 were distressed, or 44%. Only 12 homes sold for $250,000 or less in the San Lorenzo Valley during the 3rd quarter; this segment of the market is shrinking quickly.
The average price for a 3 bedroom, 2 bath home rose from about $530,000 last quarter to $559,000 during the 3rd quarter. Only two 3 bedroom 2 bath homes sold for under $300,000 last quarter, and as of today there was only one for sale.
Source: MLSListings.com statistics as of 10/23/13 for single family homes in zones 34-37 between 7/1 and 9/30/2013