Santa Cruz, Scotts Valley and San Lorenzo Valley real estate market update
2nd Quarter – through June 2018
SUMMARY: Although there are more homes for sale now, there still are not enough to create a balanced market. Buyers are most concerned about locking in low interest rates and avoiding unexpected costs. Sellers are most concerned about the timing of buying while selling, and moving to their next house. More people would sell, if they could only figure out where to retire affordably!
VOTE: 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, improving conditions for both buyers and sellers!
Experienced Realtors can help untangle this maze of decisions, preparations, negotiations, inspections, loan, title and disclosure, and even referrals to trusted agents for relocating out of the area. My goal is to make the entire process easier to understand, less stressful, and as cost effective as possible for you.
Across the board, more homes have been listed in each area, so buyers finally have some choices. Still, these charts show the inventory shortage persists. A real estate market that’s balanced between buyers and sellers usually has around six months of inventory. This imbalance keeps upward pressure on prices: Santa Cruz County has about 3 months of inventory, Santa Clara County just over 1 month.
The market continues to favor sellers. A month of inventory means, if no new homes were listed, all the homes on the market would theoretically get sold within a month.
San Lorenzo Valley has about 70 homes for sale; double the number available at the beginning of the year. Scotts Valley has 37 homes, but Santa Cruz at roughly four times the population has just 80 single family homes for sale.
The cost to borrow went up again during the first half of 2018, as the Federal Reserve steered the economy by increasing Fed rates to 1.75%-2% due to economic growth, wages, deficits and consumer price increases. Inflation remains low at around 2%, and the unemployment rate is a very low 3.5% nationwide.
Click here to see today’s 30 year fixed rate mortgages rates, averaging 4.5% at the time of this article. The Fed is widely expected to increase rates twice more in 2018, typically at 0.25% each, unless there’s a global economic disruption. So most experts think mortgage interest rates of 5% may soon be normal. Historically, this is still considered low.
SILICON VALLEY HOMES continue to appreciate – just look at that bottom line up over 20% since last year at this time, now averaging $1.5 million. Consequently, many buyers have to cast a wider net to find affordable homes within commute distance to 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!
PRICES Average home prices rose to $700,000 between Boulder Creek and Felton, called the San Lorenzo Valley. Even though housing is less than half the cost of the Silicon Valley, SLV remains a relatively unknown region despite it’s variety of relatively affordable homes for Silicon Valley’s employees.
For those who enjoy the amenities of a city, Scotts Valley has a sense of community that only a small city can offer. Scotts Valley has dedicated express and company buses over to Silicon Valley. But this location demands higher prices, averaging $1.175 million now. Both SLV and SV are less than an hour’s commute from Apple or Alphabet/ Google. The city of Santa Cruz is just 15 minutes further, with beaches, nightlife and shopping, in the same price range.
If you’re looking in the under $600,000 price range, (often a 2 bedroom home on about a ¼ acre of sloped property), expect to compete with investors and first time buyers. Let me share a few tips with you – things you won’t have thought of – to help you compete. It’s still possible to find a 3 bedroom home: look in Boulder Creek, Lompico, or the upper hills of Ben Lomond. If you’re in the $1 million range, you can buy a lovely 3 bedroom, 2 bath home on a larger property anywhere in the San Lorenzo Valley: Boulder Creek to Felton.
In the more populous city of Santa Cruz, home prices continue to appreciate… Similarly, Los Gatos Mountains averages rose also to about $1.2 million. As you look at the chart, remember some of these micro markets (unincorporated areas like Lompico and Brookdale) have so few home sales, that percentage changes aren’t statistically significant.
DAYS ON THE MARKET The Silicon Valley housing market is sizzling: the average time on market is less than two weeks. Santa Cruz County homes are on the market about 3 weeks on average, reflecting the overflow pressure from the Silicon Valley. Affordable Santa Cruz County homes receive multiple offers within the first 2-3 weeks typically, unless there is an unusual characteristic not accounted for by the price. On average, million dollar plus homes took a bit longer to sell here: 4 weeks. Still, Santa Cruz County home sellers who price their properties intelligently compared to their competition will see faster results.
SANTA CRUZ COUNTY’S APPEAL Many people from the Silicon Valley are enchanted when they discover Santa Cruz, with all of our parks for hiking, climbing, horseback riding and mountain biking, skateboarding, and volleyball games at the beach! There are dozens of beaches, from crowded to serene, walk in to hike in. The Santa Cruz lifestyle is informal, and we cherish our slower pace. There’s more room to spread out, and consequently lower stress, crime rates and smog. Imagine the difference between 1400 people per square mile in Santa Clara County, versus 440 here! 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.
CURIOUS WHAT YOUR HOME IS WORTH? Visit www.HomeValues24-7.com 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.
LOOKING FOR YOUR DREAM HOME? Click here! I’ll help you secure financing, negotiate with the seller, attend inspections with you, review disclosures and potential red flags, 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!
Whenever you have real estate questions, just text or call MC at (831) 419-9759, or, e-mail me at email@example.com
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, Reuters, 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 July 9, 2018: MLSListings.com single family residences.