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!
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.
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.
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.
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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,
just text or call MC at (831) 419-9759, or, e-mail me at firstname.lastname@example.org
I’d love to help you buy or sell your home. Your home is your castle; I’ll treat you like royalty!
Sources: MLSListings.com (Single Family Residences), Reuters, Inman News, REALTOR.org, ActiveRain.com, 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: MLSListings.com single family residences only.