Santa Cruz County home prices and trends: Market Update 1st Quarter 2018

Santa Cruz, Scotts Valley and San Lorenzo Valley real estate market update

1st Quarter 2018


Silicon Valley Homes continue to appreciate – just look at that bottom line up over 20% since last year at this time.    Consequently, many buyers have to cast a wider net to find affordable homes near the Silicon Valley.   Scotts Valley, Santa Cruz and San Lorenzo Valley areas offer relatively more affordable homes still within about an hour’s commute of the Silicon Valley.   One of my specialties is helping people relocate here!

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Ben Lomond; photo credit John Urwin

With an average home prices around $650,000, the small towns that make up San Lorenzo Valley are a little known secret, offering a variety of relatively affordable homes for Silicon Valley’s employees.  We are less than an hour’s commute from Apple or Alphabet/Google.    Los Gatos mountains offer an even faster commute, Scotts Valley has dedicated express and company buses,   The city of Santa Cruz is just 15 minutes further, with beaches, nightlife and shopping.

PRICES      If you’re shopping in the $800,000 to $1 million range, you can buy a lovely home on property anywhere in the San Lorenzo Valley: from Boulder Creek to Ben Lomond and Felton.   In our lovely small city of Scotts Valley home prices are holding steady at an average of $1.1 million.   In the more populous city of Santa Cruz home prices rose again…while Los Gatos Mountains home prices dipped slightly: a short term anomaly as the mix between higher end and average properties changed briefly.    As you look at the chart, remember some of these micro markets (Lompico and Brookdale) have so few home sales, that percentage changes aren’t statistically significant.    And Felton home prices simply reflect a rare quarter where there was only one Felton home sale priced over $1 million.

DAYS ON THE MARKET   The Silicon Valley housing market is fast paced with an average of less than two weeks on the market before going into escrow with a buyer.   Santa Cruz County homes are on the market between a month and 45 days on average.   Some of the million dollar plus properties may to take a bit longer to sell.      Most Santa Cruz County home sellers who intelligently price their properties will see faster results.    Many Santa Cruz County homes receive multiple offers within the first 2-3 weeks, especially the more affordable homes priced below or near the average.

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Castle Rock State Park – photo M.C. Dwyer

SANTA CRUZ COUNTY’S APPEAL   Many people from the Silicon Valley are enchanted when they discover Santa Cruz, with all our parks for hiking, horseback riding and mountain biking!    There are dozens of beaches, from crowded to serene.   The Santa Cruz lifestyle is informal and we cherish the slower pace.   There’s more room to spread out, and consequently lower stress, crime rates and smog.   So many people tell me they enjoy driving through the mountains to work, rather than sitting in traffic and spending a lot more money to live in Santa Clara County.

Q1 18 Housing Inventory Graph 041818

Inventory Blues dissipated a bit as spring rains give way to sunny skies.     Across the board, more homes have been listed in each area.    Still, these charts show between a few weeks to a couple of months of inventory.     A real estate market that’s balanced between buyers and sellers usually has around six months of inventory.    A month of housing inventory means that, if no new homes were listed, all the homes on the market would theoretically get sold within a month.    This keeps upward pressure on prices.

CURIOUS WHAT YOUR HOME IS WORTH?   Visit  for a quick and easy estimate!    If you’re thinking of selling, I’ll help you evaluate cost effective ways to make your home appeal to the most buyers.    My customized marketing plan is exceptional: contact me to discover why I have so many repeat clients like these.


Recent Boulder Creek home – sold for a wonderful repeat client

LOOKING FOR YOUR DREAM HOME?     Click here!   I’ll help you secure financing, negotiate with the seller, review disclosures and potential red flags, attend inspections with you, and…hand you the keys!

REAL ESTATE MARKETS ARE LOCAL   The advice of a knowledgeable local REALTOR®,  who can intelligently discuss neighborhoods and price trends, is invaluable.  Select someone you can trust, who has enough time to dedicate to you!  

INTEREST RATES & ECONOMY    The San Francisco Bay Area and Silicon Valley job market continues its brisk expansion, with  two to three dozen new residents per day according to the Mercury News, while new housing construction falls farther behind   The unemployment rate of about 2% locally (4% nationwide) has finally translated to higher wages for some.   Housing affordability isn’t getting any better though, since earnings growth is slower than the increase in home prices across most of the region.

The economy grew at a rate of about 3% during both the 3rd and 4th quarters of 2017.   Inflation is still low (2 to 2.5%), but the Federal Reserve’s concerns led them to increase the base interest rate for the sixth time in March.   30 year fixed rate mortgages rates rose to from 4% to 4.5% over the past few months, still historically low.   While that ½% increase, plus rising home prices, pressures entry level buyers, the mid and luxury markets are still strong here.

Tax reform changes are working their way through the system…the new limits on mortgage interest, sales tax and property tax deductions will affect whether some California homeowners decide to sell their homes to upgrade or downsize.    Look for a proposition on the November ballot where California homeowners can move their property tax basis across counties within the state.   This could make it easier for people to sell and move!    While many of us were concerned the SALT cap on tax deductions might inhibit luxury home sales, there’s been little sign of any slowdown.

Whenever you have real estate questions,   

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photo credit John Urwin

just text or call MC at (831) 419-9759, or, e-mail me at

I’d love to help you buy or sell your home. Your home is your castle; I’ll treat you like royalty!

Click here to look at homes for sale or sign up for your own custom home alert.



Sources: (Single Family Residences), Reuters, Inman News,,, Mercury News.     Month to month home sales prices fluctuate widely in small communities and cities, especially when property sales range between million dollar estates and fixer upper properties.   Because of this, percentage and average price changes often aren’t statistically meaningful for short time intervals.      *All stats as of April 18th 2018: single family residences only.

Top Ten Home Buyer Tips

Top 10 Buyer Tips

Did you know that, nationwide, about 1/3 of home purchasers are first time home buyers?         Since even experienced buyers sometimes make costly mistakes, I thought a top 10 list would be valuable for you.   Some tips may seem obvious, yet, each of these lessons are from the school of hard knocks.


  1. Myth: you need 20% for a down payment

🏡 With mortgage interest rates still near historical lows, waiting to save a 20% down payment might not make good financial sense.   Rents in some areas are so high, it may cost more to rent than to own.  Rent payments vanish, leaving you nothing to show but cancelled checks, while a mortgage payment may help you build equity for your future.

🏡 There are several zero to low down payment loans (just 3-3.5% down).

🏡 Find out from a lender if a Home Ready, USDA, FHA or VA loan might work for you.

🏡 First time home buyers may use gift money from family, apply for grants, borrow from certain retirement accounts, or benefit from employer assistance programs.


  1. Invest your time in getting pre-approved   Give your lender all of the documentation to get pre-approved before you start shopping for a home.

🏡 Save time: a pre-qualification letter may not be taken seriously by sellers.   Sellers prefer to work with a buyer who has put in the effort to get pre-approved.

🏡 Save heart ache: falling in love with a home it turns out you really can’t afford.

🏡 Save stress: you’ll be prepared to focus on the property itself when making an offer, not scrambling to submit loan paperwork too.

🏡 Save money: you may qualify for a lower interest rate after cleaning up credit issues you may not even know about.


  1. Location Although features of a home can be changed or repaired, location is set in stone.   Yes, neighborhoods may gentrify over time (mine sure has!),   school districts can improve, etc., but in general these are factors outside of your control.

🏡 Consider buying a cosmetically challenged house in the best neighborhood you can afford.

Welcome Bear🏡 Cast a wider net: you may find a new community where you can buy more home for your money.   That’s how I ended up living in Boulder Creek in the idyllic San Lorenzo Valley!    More and more companies allow telecommuting, now that we have  video conferencing and better on-line work collaboration tools.

🏡 Visit your potential new neighborhood at different times and on different days.   Talk to the neighbors, visit the stores and places you’re likely to go.   Chat people up!   Ask about the weather, schools, services.   Ask people why they like living there.   Listen to your intuition.


  1. Myth: buyers get a better deal by working with the listing (sellers’) agent   Reality: the sales commission  was already negotiated between the sellers and their agent before the buyer came into the picture.   While “dual agency” -representing both sides-is legal in California, I feel any merits are debatable.   This is a sensitive topic for some agents, since a “dual agent” makes more money.  It can get challenging for an agent to stay completely neutral to both parties so negotiations remain “arms’ length.”

🏡 There’s no extra fee to hire a dedicated buyers’ agent 98% of the time.

🏡 A dedicated buyers’ agent will let you know about all properties that may work for you, not just try to sell their own listings.

🏡 Buyers’ agents owe you their loyalty, and, during difficult negotiations, they will advocate on your behalf.


  1. Hidden Gems “Something must be wrong with that home. It’s been on the market for months!”   Stale listings, tenant occupied, and ugly ducklings may offer hidden potential.   Don’t be afraid to consider old listings!   You just might find your hidden gem.

🏡 Sometimes, the seller just missed the right price in the beginning.

West Park exterior.JPG🏡 Tenant occupied homes can be tough to show, and may be messy or dirty.    If that’s all that’s wrong, you may have uncovered a diamond in the rough that’s easy to polish!

🏡 When photos are dark or unappealing, fewer agents and buyers visit the property.   But, it might be a winner.  These often turn out to be some of my favorite hidden treasures.

🏡 Being clever or handy, having vision, or being able to afford some repairs down the road may allow you to open more doors than a buyer who’s only chasing pretty new move-in-ready home listings.


  1. Know the market Understand the nuances of the different neighborhoods, and recent price trends, particularly differences between asking versus selling prices.

🏡 There was a time when a seller would be lucky to get even one offer (2009, 2010).   Fast forward to 2018, now it’s the opposite – a buyer would be lucky to be the only offer.   Right now, buyers won’t get anywhere by low-balling a property when it first comes on the market.

In a hot market, like many parts of the San Francisco and Monterey Bay Areas right now, consider shopping for homes that are listed at prices 10-15% less than what you can afford, so you have negotiating room if necessary.


  1. Write a Winning Offer   In many parts of the country, there are more buyers than sellers.    Yet, even in these competitive markets, there are still ways to write an offer that will stand out for the sellers.

🏡  Do not rely on real estate website values!    Computer algorithms calculate property values based on unrefined mega data – no one at that website has been inside the house nor seen any of the homes around it.     An experienced local agent can guide you about an offering price that considers this refined market intelligence, as well as the current direction offers are moving in your market.

🏡 Consider letting the sellers know why you want heart stone path.jpgto buy their property.    In a crowded field of anonymous-feeling offers, a personal touch like a letter may help.


🏡 What is the likely psychology of competing buyers?     Understanding strategies likely being used by other buyers may give you an edge.

🏡 Figure out what you have to offer the seller that may be unique.   What is important to this particular seller?   What might make your offer rise to the top of the stack?   Usually it’s price, but, not always…there are many terms to consider when crafting a great offer.


  1. Contingencies Contingencies are protections that are built into the purchase agreement, giving buyers time to investigate and get their loan.   Recently around the Silicon Valley, we’ve seen buyers waiving their contingencies – their protections – just to win the bidding when there are multiple offers.   It’s understandable to be frustrated after losing a few houses, but is it wise to waive your protections?

🏡 Be sure you really understand the pros and cons before you sign an offer waiving contingencies.


  1. Inspections The seller may provide existing inspections; that’s good information.   septic lid under stairsStill, consider getting your own, and plan to be there to talk with the inspector.       This is your big chance to learn about your property’s condition before you buy it.   People who go on vacation or stay at work during their inspections are less likely to truly understand the property’s condition.

🏡 A buyer (not mine!) relied on the sellers’ report; the inspector said he couldn’t see behind all the occupants’ belongings.   Even though the buyer was susceptible to molds, for whatever reason she didn’t get a mold inspection.   Turned out there was mold on the walls behind the furnishings in multiple rooms.   Cost to repair was in the tens of thousands of dollars.

🏡 Invest the time and effort to get contractor bids for repairs suggested in the inspections, so you have a grasp on the likely costs.

🏡 A buyer (mine) didn’t think any inspections were needed because the home was newly built.   I encouraged investing the time and money, since many contractors use sub-contractors who may have missed completions or may have even done things incorrectly.   The inspectors found quite a bit wrong – in fact the summary of problems was several pages, dozens of items.     The buyer was able to require the seller/contractor to fix all the issues before closing escrow and moving in.


  1. Don’t make big changes! Don’t change jobs, quit your job, invest in a new business, open a new credit account, or make any large purchases!

🏡 If you plan ahead, a lender can often assist you through the process of getting a home loan, even when you are relocating for a new job.

🏡 Even if you are expecting a nice big down payment for your home purchase from selling a property, your lender needs to see a stable income source to qualify for a loan, so don’t quit your job just because you’re moving anyway.

🏡New credit cards or last minute financial changes can delay your property purchase, cost you extra fees, and add unnecessary stress to your move.

Did you find these tips helpful, but have more questions?   Just text or call MC at

(831) 419-9759, or,Minolta DSC

I’d love to help you buy your home – because

Your home is your castle; I’ll treat you like royalty!

Click here to look at homes for sale or sign up for your own custom home alert.