The San Lorenzo Valley turned in a smoking hot second quarter of 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).
The San Lorenzo Valley residential real estate market was still red hot this July, when 32 homes sold at an average price of $439,818. Similarly, 36 homes sold in August at an average sales price of $426,613. In order not to skew the average, I removed the most expensive property from the calculation. Because the 87 acre Johnson ranch in Boulder Creek fetched $2.25 Million, if it had been included in my calculations, the average price would have been $477,263.
This year, for the first time since 2008, a Boulder Creek home sold for over one million dollars. According to the MLS, only a dozen other homes have sold in this price range, all between 2005 and 2008.
This 4800 square foot 5 bedroom home featured a gourmet kitchen, pool, and about 4 private, usable acres with an adjacent parcel sold separately.
Average prices are the highest they’ve been since August of 2008. SLV Real Estate prices have recovered well from the low point in February 2009 and September 2011, when the SLV average home prices briefly touched $270- $280k.
The pace in the first quarter of 2013 was 63 sales, with an average price of $348,842 between January and March.
This quarter, 12% of homes went pending sale within 7 days, compared to 22% last quarter, giving buyers just a little more breathing room. Homes went into escrow on average within 43 days of being listed. The average days on market was 69 days during the first quarter.
The San Lorenzo Valley simply doesn’t have enough sellers willing to sell their homes, compared to all the buyers who want to buy.
The chart on the right shows we’ve just 4 months of inventory – a seller’s market. (6 months is considered a balanced market.) This competition puts upward pressure on home prices.
Multiple offers are common. It takes steel nerves to persist as a buyer right now. Many buyers want to lock in affordability: even though interest rates have gone up, they are still very low by historical standards. My sense is this market flurry is a result of buyers watching their purchasing power diminish as both interest rates and home prices rates rise.
The Federal Reserve has been talking for a couple of months about curtailing their bond repurchase program, which they’ve used to keep interest rates low until unemployment and other economic indicators stabilizes at an acceptable rate. This week their remarks show they’re poised to reduce their economic stimulus package as early as September.
Distressed sales are declining as a percentage of overall sales to just 25% of the total, although they account for about 50% of the sales of homes priced under $400,000, and about 75% of homes priced under $300,000.
Only 17 homes in the San Lorenzo Valley sold for $250,000 or less: all but a couple of 1 bedroom homes were contractor specials requiring cash buyers.
Although a couple of lesser quality 3 bedroom 2 bath homes sold for under $300,000, the average price for a 3 bedroom, 2 bath home is now about $530,000.
If you have been thinking about selling your house, there’s still pent up demand. Even if you have a distressed property to sell, don’t worry – about 40% of my transactions this year were short sales. To find out what your San Lorenzo Valley home is worth now, click here or call MC Dwyer, Century 21 Showcase REALTOR at (831) 419-9759.
Source: MLSListings.com statistics as of 8/6/13 for for single family homes in zones 34-37 between 4/1 and 7/31/2013