Here are the latest real estate prices around Santa Cruz County for the first quarter of 2016
On average, single family residence prices in Santa Cruz County rose about 10% during the first quarter over the last quarter of 2015. As you can see in the above chart, each micro-zone is moving in a different direction. Scotts Valley had an unusually high number of million dollar plus sales in the first quarter, so I believe the 20% figure is an anomaly. Brookdale only had one sale – a foreclosed home. Ben Lomond got off to a very slow start in 2016. San Lorenzo Valley had far fewer upper end home sales during the first quarter, on about half the sales volume of the 4th quarter 2015. Why?
The most widespread problem is that there are very few homes for sale! Right now, San Lorenzo Valley only has 48 single family homes for sale. Scotts Valley, 41. Los Gatos Mountains, 29. City of Santa Cruz 26. Only 288 homes are for sale in Santa Cruz County! The following chart shows the problem clearly. A normal market, balanced between buyers and sellers, has about 6 months’ worth of housing inventory. We have about 2 months of inventory. You can also see in the charts below that this is one of the factors that is driving prices upward.
Santa Cruz County is influenced by real estate conditions in the Silicon Valley, where prices continue to rise. In Santa Clara County, single family homes started the year 2015 at a median sales price of about $850,000…rising to about $945,000 by December 2015. By March 2016, the average sales price was $1.38 million. One of my buyers was interested in a San Jose home that got multiple offers, over $100,000 above asking price – about 12%.
Fortunately for buyers in Santa Cruz County, while multiple offers are still common, the amount the average buyer has to pay above asking price is far less, on average:
Santa Cruz County Santa Clara County
The question of how much a buyer should offer is tricky: here’s where an experienced local REALTOR can really help you! Choose an agent who knows the inventory well and can knowledgeably compare the desired home’s asking price to other recent home sales.
Our more affordable housing continues to attract Silicon Valley commuters, as well as second home buyers, investors, and retirees. The lifestyle here holds appeal for people who would rather live closer to beaches and mountains, parks and recreation, amidst a lower population density which conveys benefits like lower stress, crime and smog.
Given the weakness in the global economy, many think the Federal Reserve will pause and let the market absorb their first increase in interest rates in a decade. Right now the market is expecting one more increase this year, although some Fed Board Members are still talking about multiple rate increases. December’s 0.25% increase in the Fed Funds rate has not affected the 30 year mortgage rate significantly, most likely because the increase was already factored in by the market. Most buyers are still able to get mortgage rates in the low 4% range.
I’ll close with comments about the new consumer disclosure laws that went into effect in October of 2015. “TRID” (TILA RESPA Integrated Disclosure, also known among agents as “The Reason I Drink”) has delayed closing schedules for months now, as lenders and title companies get used to the new requirements and adapt their internal software systems. Many of the escrows I’ve closed were affected by delays ranging from a few days to as much as two weeks.
Curious what your home is worth? Visit www.HomeValues24-7.com for a quick and easy estimate! If you are considering selling, I’ll help you evaluate cost effective ways to make your home sparkle. My customized marketing plan is exceptional: contact me to see why I have so many repeat clients.
Looking for your dream home? I’ll help you find financing, negotiate with the seller, inspect what concerns you, and hand you the keys!
*Statistically, some communities had too few home sales for the percentage changes to be meaningful.
Sources: my independent research using MLSListings.com (Single Family Residences), Reuters, Inman News, REALTOR.org, ActiveRain.com, Mercury News