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Santa Cruz County real estate review October 2019

Santa Cruz, Scotts Valley, Los Gatos Mountains & San Lorenzo Valley home prices

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AFFORDABLE HOMES NEAR THE SILICON VALLEY:

Average single family home prices continue to range between $1 to $1.5 million across Santa Cruz County and the greater San Francisco Bay Area.    Many people who work in the Silicon Valley are delighted to discover affordable housing in the San Lorenzo Valley –  within 45 minutes to an hour’s commute to major employers like Apple, Alphabet (Google), Facebook, etc…        The San Lorenzo Valley offers a more relaxed, rural lifestyle at about half the price of neighboring Scotts Valley, which combines the conveniences of a small city with a sense of community.   Santa Cruz home prices have been stable at about $1.1 million, where residents can enjoy legendary parks and beaches, plus a variety of shopping and restaurants, night life and amenities available in a city of about 60,000 residents.

  

SUMMARY:

San Lorenzo Valley sales prices softened a bit in the 3rd quarter, as the number of homes listed for sale increased.    The number of home sales rose as well, while buyers who’d faced stiff competition in the past found it easier to win the bidding process without necessarily having to offer much over asking price.      On average, homes sold for 100% of list price.

Scotts Valley home prices fell slightly from the 2nd quarter, but remained up over 9% compared to the same period last year, while the number of sales held steady.

Laurel road near Hwy 17 in Los Gatos edited.jpgLos Gatos mountains region had a measurably lower average price in the 3rd quarter, but it was due to an anomaly: just 11 homes sold for over $1 million and the highest price was $1.7 million.  3 homes sold for less than $500,000 (one with a code violation, one a contractor special, and one quite remote and off the grid).   During the 2nd quarter, this region experienced a more typical 26 homes selling in excess of $1 million; 2 were over $2 million.

Santa Cruz – the city – saw home price appreciation of 2.4% during the 3rd quarter compared to the 2nd quarter, as the number of homes sold declined by over 10%.    Prices were just 1.7% lower than this time last year.

Santa Cruz County as a whole saw single family home prices easing about 5% compared to the 2nd quarter, but prices were flat compared to a year ago.    The number of home sold rose about 6% over the 2nd quarter but was level with the number sold last year.

Santa Clara County experienced a combination of price easing and slower sales overall, after many years of rapid appreciation.    Average prices rolled back to the average reached in the 2nd quarter of 2018.

Days on market – on average across Santa Cruz County, it takes 4 to 5½ weeks for a home to go into escrow with a buyer now, continuing a trend that’s been increasing several days each quarter.

California’s August statewide results according to the California Association of REALTORS:  median home price rose 1.5% to $617,410 when compared to July’s median of $607,990.    This was up 3.6% compared to the August 2018 median of $595,920.

CoreLogic reported July’s overall mortgage delinquencies remain at their lowest rate in 20 years nationally.    Many experts believe stricter mortgage guidelines and higher down payments over the past decade will prevent a real estate crisis when the next economic downturn occurs.    Just four states experienced increased delinquencies:               Vermont, New Hampshire, Iowa and Minnesota.

Mortgage interest rates – after a brief increase in interest rates earlier this year, recently the 30 year mortgage rate dipped to 3.63%, even lower than last quarter’s 3.99%.    These rates are historically incredibly low and appealing to home buyers.     Many homeowners can benefit from refinancing now – consult your loan professional, or reach out to me if you need references to excellent local lenders.

As you look at the price chart, remember some of these micro markets (like Brookdale) have so few home sales, that percentage changes aren’t statistically significant and average prices can be dramatically skewed when one of the few sales exceed a million dollars.    It’s more useful to look at the San Lorenzo Valley as a whole.

INVENTORY:

Months_of_Inventory_100819

These charts illustrate housing inventory over the past three years.   Around six months of housing inventory is considered a market that is balanced between buyers and sellers.   These graphs show that both regions continue to experience an inventory shortage of just two to three months of inventory.   That means, at the current rate of sales, we’d run out of homes for sale in just two to three months.

At the time of this writing, San Lorenzo Valley has 86 single family homes for sale (vs 84 last quarter), compared to 80 at this time last year.     Scotts Valley has 39 (vs 51 last quarter), compared to 32 homes for sale at this time last year.      Santa Cruz, despite having four times the population of Scotts Valley, has 63 homes for sale (vs 72 last quarter), compared to 68 at this time last year.

ECONOMY

Economic growth as measured by GDP (Gross Domestic Product) was 2.1% during the 2nd quarter, (3.1% during the 1st quarter of 2019, and 2.2% in the 4th quarter of 2018).     Consumer price increases (a measure of inflation – something the Federal Reserve monitors closely) was 1.7% in August (1.8% in May 1.5% in January and considerably lower than 2.9% in July 2018).    The unemployment rate remains steady at 3.6%     (3.7% nationwide in January).    Wages grew at a 4% rate during June (versus 3% in May and 4.5% during this period last year).

 

SANTA CRUZ COUNTY’S APPEAL:

 

Scotts Valley Clouds

Photo Credit: John Urwin

People from the Silicon Valley are enchanted to discover Santa Cruz County’s appeal.   We have dozens of parks for hiking, mountain biking, climbing, horse-back riding, swimming, skateboarding and surfing.    There are dozens of beaches, from popular to serene, walk-in to hike-in, as well as dog-friendly Lighthouse Field State Beach.   The Santa Cruz lifestyle is informal: we cherish our slower pace.   With 1/3 the population density of Santa Clara County, there’s more room to spread out in Santa Cruz County, and consequently lower stress and crime rates.    (Just 440 people/square mile live here, compared to 1400 people/square mile living in Santa Clara County.)  Most homes have high speed internet, and increasingly, companies are allowing employees to work from home at least part of the time. Many people say they enjoy driving through the mountains to work, versus 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 by suggesting cost effective ways to make your home appeal to more 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.  Hire a REALTOR® you can trust, who has enough time to dedicate to you!    I will help you untangle the maze of decisions, preparations, negotiations, inspections, title and disclosures as you buy or sell your home.    Relocating? – I can also connect you to a trust-worthy REALTOR® wherever you’re going.   My goal is to make the entire process easier to understand, less stressful, and as cost effective as possible for you.

Welcome BearWhenever you have real estate questions,    just text or call MC at (831) 419-9759, or, e-mail me at mcd@mcdwyer.com

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:  MLSListings.com, Reuters, California Association of REALTORs, REALTOR.org, ActiveRain.com, Mercury News, CoreLogic, FreddieMac, MortgageNewsDaily.com, Google.     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 October 8, 2019:  MLSListings.com single family residences.

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Remodeled home for $325,000: 13550 Bear Creek Road #10

Graciously remodeled home features views of trees and a park like setting. Enjoy newer appliances, hardwood flooring, skylights, fixtures, roof,  central forced air gas heater, updated plumbing & electrical. Sitting high above the street affords a wonderful sense of privacy: it’s like living in a deluxe tree house.

The open concept floor plan is presently styled as a spacious one bedroom home, (there used to be two bedrooms). There’s a bonus room, a large deck and a smaller brick patio, and a little-used walking trail up the hill.   Downstairs is a full height basement with washer/dryer: room for storage or a workshop.

Just a 10 minute stroll from picturesque small town of Boulder Creek, the former Elk Club site is now the Bear Creek Stock Co-Op: 24 homes that share 12 acres with a clubhouse (see picture with furniture & exercise equipment), BBQ area & two trails to creeks & beaches.   This is ideal for a permanent residence or a vacation cabin.   

HOA dues of $2520/ year cover water, garbage, road & common area maintenance. Because it’s a stock co-op, conventional loans won’t work but in this case, seller financing is available for well qualified borrowers with 20% down payment.

CLCOMMUNITY BBQ AREACLUBHOUSECLUBHOUSESHARED 12 ACRES

Santa Cruz area Real Estate Market Report July 2019

2nd_Qtr_2019_Avg_Prices_070919

AFFORDABLE HOMES NEAR THE SILICON VALLEY:

With average single family home prices of $1 to $1.5 million across the Bay Area, affordability concerns continue to push people who work in the Silicon Valley to seek affordable housing anywhere within about an hour’s commute.    The San Lorenzo Valley sparkles with some of the most attractive prices anywhere in the greater bay area, within just about a 45 minute to 1 hour commute to most major employers (Apple, Alphabet (Google), Facebook, Netflix…).    For those who prefer a small city, Scotts Valley offers a quick commute, followed by Santa Cruz with its great beaches, shopping, night life and many amenities.

SUMMARY:

The 2nd quarter trend picked up momentum in the number of sales as well as price appreciation across all areas.      On average in our region, it takes three to four weeks for a home to go into escrow with a buyer now; slightly longer than last year.    Looking at statewide numbers, California Association of REALTORS just reported May’s statewide median home price was $611,190, up 1.4 percent from April and up 1.7 percent from May 2018.     The National Association of REALTORS reported that the national median existing-home sales price (all housing types) was $277,700 in April, up 4.8% from a year ago, the 87th consecutive month of year-over-year gains.    CoreLogic reports serious mortgage delinquencies are at their lowest rate in 20 years nationally.

After a slow start to 2019, many more homes were listed and sold during the second quarter.   After a brief increase in interest rates earlier this year, recently the 30 year mortgage rate has fallen back down to 3.99%, historically very low and appealing to buyers who’d paused, waiting for better conditions.    Consumer confidence is rising, and the number of IPOs (Initial public stock offerings) in the SF Bay Area has brought new wealth to the region….some of which is funneling into real estate.

As you look at the price chart, remember some of these micro markets (like Brookdale & Lompico) have so few home sales, that percentage changes aren’t statistically significant and average prices can be dramatically skewed when one of the few sales exceed a million dollars.    It’s more useful to look at the San Lorenzo Valley as a whole, where prices rose about 5% over the 1st quarter of 2019, and were a tad lower than the same time last year.

Scotts Valley had the largest shift with 35 million dollar plus sales during the 2nd quarter of 2019, up from just 12 home sales in that price segment during the 1st quarter of 2019.     The most expensive home, a 5500 square foot Pasatiempo estate with Monterey Bay views, sold for $4.5 million, while the least expensive home sold for $650,000.

Santa Cruz County as a whole rose a solid 9% over the first quarter, and 13% over the same time last year, closely following the trends in Santa Clara County.

INVENTORY:

Months_of_Inventory_070919

These charts illustrate housing inventory over the past three years.   Around six months of housing inventory is considered a market that is balanced between buyers and sellers.   These graphs show that both regions continue to experience an inventory shortage of just two to three months of inventory.   That means, at the current rate of sales, we’d run out of homes for sale in just two to three months.

At the time of this writing, San Lorenzo Valley has 84 single family homes for sale (up from 40 in January and similar to this time last year.     Scotts Valley has 51 (up from January’s 24 homes and more than last year).   Santa Cruz, despite having four times the population of Scotts Valley, has 76 single family homes for sale, (up from just 38 in January and more than last year).

ECONOMY

The bond market has already priced in the expectation that the Federal Reserve will lower interest rates soon.   As a result, interest rates on the 30 year fixed mortgage have fallen to around 4.00%,  (down from 4.6% in January.) Click here to see today’s 30 year fixed rate mortgages rates   People who purchased at recent levels of 5% or higher may want to discuss the prospect of refinancing with their lenders.

Economic growth as measured by GDP (Gross Domestic Product) rose to 3.1% during the 1st quarter of 2019, (2.2% in the 4th quarter).     Consumer price increases (a measure of inflation – something the Federal Reserve monitors closely) was 1.8% in May (up from 1.5% in January but down from 2.9% in July 2018).    The unemployment rate is holding steady at 3.6%     (3.7% nationwide in January).    Wages grew 3% (over May 2018),  about 1.3% growth after inflation.

DAYS ON THE MARKET:

In contrast to Santa Clara County homes, which went into escrow within about three weeks of being listed, San Lorenzo Valley homes take on average three weeks to a month to go into escrow.    Some properties still sell within the first week or two, while others take a couple of months to find a buyer.     Scotts Valley and Santa Cruz city homes typically take 4-5 weeks to go into escrow, while Santa Clara County is back down to about 3 weeks.

SANTA CRUZ COUNTY’S APPEAL:

People from the Silicon Valley are enchanted to discover Santa Cruz County with all of our parks for hiking, mountain biking, climbing, horse-back riding, and skateboarding.    There are dozens of beaches, from popular to serene, walk-in to hike-in, some dog-friendly.   The Santa Cruz lifestyle is informal: we cherish our slower pace.   With 1/3 the population density of Santa Clara County, there’s more room to spread out in Santa Cruz County, and consequently lower stress and crime rates.    (Just 440 people/square mile live here, compared to 1400 people/square mile living in Santa Clara County.)   Many people say they enjoy driving through the mountains to work, versus 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 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.  Hire a REALTOR® you can trust, who has enough time to dedicate to you!    I will help you untangle the maze of decisions, preparations, negotiations, inspections, title and disclosures as you buy or sell your home.    Relocating? – I can also connect you to a trust-worthy REALTOR® wherever you’re going.   My goal is to make the entire process easier to understand, less stressful, and as cost effective as possible for you.

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Photo Credit John Urwin

Whenever you have real estate questions,    just text or call MC at (831) 419-9759, or, e-mail me at mcd@mcdwyer.com

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:  MLSListings.com, Reuters, REALTOR.org, ActiveRain.com, Mercury News, CoreLogic, FreddieMac, BankRate.com, Google.     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, 2019:  MLSListings.com single family residences.

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Fall Home Maintenance Checklist – Santa Cruz Mountains

architecture-autumn-bench-206673 Free pexels dot com 092418

Regardless of whether you rent or own your home, these tips can save you money, keep you warmer, help you breathe cleaner air and even keep you safe.     Even though today it’s a warm late summer day, the first day of fall is right around the corner on September 22nd!       Make good use of the wonderful weather while it’s still light after work, and over the next few weekends as you check things off this list.

brown beside fireplace near brown wicker basket
Photo by rawpixel.com on Pexels.com

If you use a chimney cleaning service, call early to schedule this annual maintenance before the rush.    Creosote build-up is dangerous.   Use the sun’s remaining warmth this fall to make sure your wood pile for the winter is dry: burning dry wood reduces unhealthy smoke for everyone.   Check your wood pile covers and tarps for gaps and tears and replace or repair if necessary.

 

Check your heater thermostat batteries & change the filter.    If you have pets, plan to change filters every 60 days; if not, every 90 days.    If you turned the pilot light off for the summer, you may want to relight and test it before the first cold snap.   If you haven’t had your heater serviced recently, consider calling a professional in before the rush.

Check to see if any outdoor safety light bulbs have burned out.   The days are already getting shorter, and the time change will be on November 4th this year.

Gutter cleaning Free C21 Online shutterstock_215924530-900 092418Make sure debris is swept off the roof.  Clean out gutters and downspouts before the first rain, which is often sometime in October in the SLV.    Meanwhile, a clean roof adds a measure of fire safety.   While some homeowners do this themselves, others prefer to hire the task out – in either event be extra cautious around power lines and risk of falling.

Some overhead fan blades’ direction can be switched twice a year.   This can save on heating or cooling bills.

Insulate exposed water pipes.    While it’s not likely to freeze for several months, once it gets cold you may not be outside as often to notice which pipes could use insulation.

Trim any tree limbs that have grown to overhang the roof, chimney, power lines or walkways.   This helps with fire safety throughout the year.   Keep in mind that limbs will droop a lot from weight once they get heavy with rain.   During the winter this extra weight and winds can cause some limbs to break and fall.

Stock up early on flashlights, candles, water and emergency rations.

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Autumn Road

If you have a generator, perform any routine maintenance, change out the gasoline, and fill up a few gas cans.

Sharpen up your chain saw blade so you can pitch in if storms drop a branch in your street.

Form a neighborhood work party to check and clear fall leaves and other debris out of road culverts and drainage ditches so water doesn’t back up, flood or even wash a road out.

Decks will last a lot longer with maintenance, including cleaning out the debris lodged between surface planks, scraping off mosses which can retain water, and treating with a water repellant sealer.

Check the weather stripping around your windows and doors and replace what’s come loose.   This will cut down on drafts and heat loss.    Well placed caulking can help prevent rain leaking in when the storms start blowing sideways, and is a relatively easy do-it-yourself maintenance task.

Living in the Santa Cruz mountains is a wonderful experience that can be especially rewarding when you’ve taken time to prepare.     As my dad is fond of saying, “Winter’s coming!”

Fall Snowball bush

July’s CA statewide median home price was $591,460, down 1.9% from June, up 7.6% from July 2017.

San Lorenzo Valley July median home price $680,000; up 6.25% over July 2017

 

MC Dwyer (CA DRE#01468388) is affiliated with Century 21 Showcase REALTORs

Whenever you have real estate questions,    just text or call MC at (831) 419-9759, or, 012_Fireplace by Michael Eckermane-mail me at mcd@mcdwyer.com

I’d love to help you buy or sell your home.

Click here for a free market value of your property..

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.

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

Q1_2018_Average_Prices

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 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.

 

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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,   

Minolta DSC
photo credit John Urwin

just text or call MC at (831) 419-9759, or, e-mail me at mcdwyer@century21.com

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:  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.

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 mcdwyer@century21.com

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.

Santa Cruz and San Lorenzo Valley real estate report

Santa Cruz and San Lorenzo Valley real estate prices & trends 2017-2018

This might offend a few people, but, honestly, most of the 27 affordable Santa Cruz County homes for sale (priced under $600,000) right now aren’t suitable for you, your sister, your aunt or your uncle…although a couple might work for grandparents (retirement community). You’re going to need an experienced, boots-on-the-ground REALTOR® like me helping you save time sifting through this chaff.    That said, there are a hand full of good affordable homes…

hyena-2323344_1280 from PixabayAnything decent, priced appropriately, is quickly circled by a teeth gnashing pack of hungry buyers, only one of which will win the bone – I mean home. Okay, teeth gnashing is an exaggeration, and I really do like working with buyers. Still, it’s really competitive right now, so if you’re thinking of buying, call or text me: I can help you prepare a successful purchase strategy.

2 BUYER TIPS:  Get pre-approved for a loan before you shop for homes – this way you can clean up any issues on your credit report that may cost you a higher interest rate.   Plus then you can focus on the house purchase, having finished all the lender paperwork.     Don’t wait until the weekend to shop…many homes sell on weekdays!

And if you’re reading this because you’re thinking of selling – call me now! Don’t wait until spring (or worse).

2 SELLER TIPs: I’ll help you prioritize how to get the property ready at the least cost.   It nearly always takes sellers longer to get their property ready than they think it will.

THE INVENTORY BLUES This housing shortage is the worst I’ve seen in years.   It’s not just seasonal – here are graphs going back for years.

Housing Inventory Graph SLV SCC SCC 011218For a frame of reference, a market evenly balanced between buyers and sellers has about 4-6 months’ worth of inventory for sale. Buyers are frustrated because there simply are not enough homes for sale, especially in the under $1 million price range.   Why buy now? Besides the inherent benefits to owning your own home (stability, control, wealth building, etc.), consider that prices and interest rates are both forecast to continue to rise, and rents are just plain exorbitant.

San Lorenzo Valley has only 31 homes for sale right now – that’s about half of the inventory level when I last reported in October. 9 of the 31 are priced at over $1 million. Buyers in that price range may be able to negotiate, since some of those homes have been on the market a month or longer…

Scotts Valley has only 11 homes for sale (normally 30+), while Santa Cruz – a far larger city – has only 22. It’s crazy. Right now, Santa Cruz County has only 175 single family homes for sale (down about 50% compared to late summer). If you’re considering selling your house – market conditions are incredible. Call me soon so I can help you strategize your next move.

Here are three affordable Santa Cruz Mountains homes I just helped sell:Just_Sold_3_homes_011218_facebook_blog

Oh, the stories I could tell about just these three transactions: The Buyers! The Sellers! The agents! The inspectors! The lenders! But, I never share confidential information. Two of these houses need new decks, one needs a new septic leach field, and one needs a new roof. Still, three would-be buyers left the negotiating tables empty handed. The point is, sellers need help disclosing and buyers need assistance understanding the condition of these kinds of affordable, Santa Cruz mountains properties.

BAY AREA’S HOUSING PROBLEM It’s not news that there are very few homes for sale in the region, and that’s driving prices up. Rental rates are high because vacancies are low. For 2018, buying an affordable home in the Santa Cruz Mountains is likely to get even harder. The reasons are complex:
• New jobs & people moving in to the region exceed people moving into larger homes, downsizing or leaving –home owners feel like there’s nowhere to go.
• Not enough new homes are being built (especially in Santa Cruz County).
• People are staying in their homes longer
o Retirees were already worried about keeping their tax basis
o Potential move-up buyers now worry about tax deductions
o This keeps the supply of homes for first time buyers low.
• A lot of entry level homes were foreclosed and then purchased for “all cash” over the past 6 years
o Those investors are getting a great return on their investment by renting the houses out … they’ve no reason to sell.

SANTA CRUZ COUNTY REAL ESTATE

SUMMARY The number of homes sold across most of Santa Cruz County was steady in the 4th quarter, but prices diverged: Scotts Valley and Los Gatos mountains home prices rose under continued pressure from Silicon Valley home prices. Santa Cruz County homes were on the market for about 40 days –twice as long as Santa Clara County at just 19 days on average. Home prices were flat in the San Lorenzo Valley at the end of 2017, although the micro markets of each town moved up and down.

SC_RE_Stats_Q4_2017

PRICES Home prices in Scotts Valley along with Santa Cruz took a bit of a breather in the 4th quarter of 2017 compared to the 3rd quarter, but were still higher than last year. In Boulder Creek, two “homes” sold in the 4th quarter with separate MLS numbers for a total of $23,000 (neighboring shacks on slides), skewing prices temporarily. But Los Gatos Mountains continued it’s ascent as the closest community to the Silicon Valley, where average prices are now over $1.5 million. After years of double digit appreciation, average single family home price increases across the San Lorenzo Valley quieted during the last quarter of 2017. Lompico/ Zayante isn’t really in decline, there were just fewer higher end sales there. In fact, with the water supply situation stabilized, one of my main concerns is gone. Some of these micro markets (Lompico and Brookdale) have so few home sales that percentage changes aren’t statistically significant.

Affordable homes near Santa Cruz (priced $600,000 or less) are nearly non-existent right now. There are only 10 homes in this price range all across the San Lorenzo Valley, and many of them have “issues” and have been on the market for a couple of months. Let’s just say I wouldn’t recommend them for anyone you care about, unless you care about someone who is a contractor. Usually, the San Lorenzo Valley has some of the most affordable homes in Santa Cruz County: SLV real estate prices run about two thirds of the Santa Cruz County average.   Last quarter, many of my sales were in this price range.   Whether you’re buying or selling, you’ll need someone with my kind of experience to navigate the possible pitfalls in rural properties at this price.

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, review disclosures and potential red flags, attend inspections with you, and…hand you the keys!   Plus, I’m readily available after you move in to offer local referrals and general assistance.

SILICON VALLEY The housing shortage in the Silicon Valley continues to drive the region’s prices higher. In Santa Clara County, the average price of a single family home in October reached $1.5 million. With an average home price of $630,000, the San Lorenzo Valley and Boulder Creek are a little known secret offering relaxing small town hide-a-ways for high tech workers. Boulder Creek’s affordable housing is less than an hour’s commute from Apple or Alphabet (Google). One of my specialties is helping people relocate here!

SANTA CRUZ COUNTY’S APPEAL People from the Silicon Valley are understandably enchanted by Santa Cruz: we have so many state parks for hiking, horseback riding and mountain biking! There are dozens of beaches – from crowded to serene. We have small cities and towns. The Santa Cruz lifestyle is less formal and we adore the slower overall 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.

REAL ESTATE MARKETS ARE LOCAL The advice of a knowledgeable local REALTOR®, who can show you the trends in your neighborhood and your specific kind of property and price range, is invaluable. Select someone you can trust, who knows your area well. Understanding pricing, analyzing location, property appeal and condition, requires local market intelligence. When choosing your REALTOR®, also consider if the agent has enough time to dedicate to you!

DAYS ON THE MARKET Santa Cruz County homes are on the market about 40 days on average before going into escrow with a buyer. Intelligently priced and especially affordable homes are selling quickly, usually receiving multiple offers within the first 2-3 weeks, others even faster.

INTEREST RATES & ECONOMY The big news is tax reform…new limitations on mortgage interest, sales tax and property tax deductions will affect many California homeowners. 30 year fixed rate mortgages rates averaged just over 4% for the past few months, still historically quite low.  But, the Federal Reserve intends to increase their benchmark interest rate for lending to banks several times this year.   The economy was estimated to grow about 3% over the 3rd quarter, and there’s minimal inflation (under 2%).  Jobs and employment are quite strong, with unemployment rate at just 4% nationwide. Housing affordability isn’t getting any better though, since earnings growth is slower than the increase in home prices across most of the nation. Silicon Valley incomes are growing at the 4th fastest rate in the nation., with radical innovations in the way we live continuing to pour out of the brilliant minds working in the Silicon Valley.

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 multi million dollar estates and fixer upper / tear down properties. Because of this, percentage and average price changes often aren’t statistically meaningful for short time intervals. *All stats as of 1/09-12/2018: MLSListings.com single family residences only.

San Lorenzo Valley real estate prices August 2017

San Lorenzo Valley home prices, Scotts Valley home prices and Santa Cruz home price changes through August 2017:

Aug_and_Q2_2017_Santa_Cruz_County_SLV_SV_SC_stats

PRICES   Feeling like the cooler weather and yellow leaves dancing in the light breezes of fall, average single family home prices across Santa Cruz County seem like they might level off a bit this fall.      The county’s affordable price range, $600,000 and under, is still sizzling like a summer bar-b-que, with multiple buyers pursuing just a handful of homes.     The San Lorenzo Valley has some of the most affordable homes in Santa Cruz County: home prices run about 67% of the county average.

Here’s an example of an affordable San Lorenzo Valley home I sold.   This two bedroom home received three offers, selling for $429,000.     Within the next week I expect to have a larger two bedroom home listed – please call for details.114_Roble_ext

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.

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!

SILICON VALLEY The housing shortage in the Silicon Valley is a systemic problem.    In Santa Clara County, the average price of a single family home in August was $1.4 million, holding steadily over the past year.    Santa Cruz County is a great option when high tech workers look for reasonable housing prices within commute range.    One of my specialties is helping people relocate here!

SANTA CRUZ COUNTY’S APPEAL People from the Silicon Valley are understandably enchanted by Santa Cruz, with our beaches, many parks, smaller cities and towns.     The Santa Cruz lifestyle is less formal with a slower overall pace.   There’s more room to spread out, and consequently lower stress, crime rates and smog.   People tell me they enjoy driving through the mountains to work, rather than sitting in traffic and spending more money to live “over the hill.”

INVENTORY    If you’re considering selling your home – early fall conditions are still ripe!     The market still doesn’t have enough homes for sale in the under $1 million price range.   San Lorenzo Valley has about 70 homes for sale – about 20 more single family homes than at this time last year – but this year, 10 are priced over $1 million, twice as many as last year.

Scotts Valley has about 40 homes for sale, stable, nearly ¾ of which are priced over $1 Million.     Santa Cruz – a far larger city –  has just 40 homes for sale, again, ¾ of which are over $1Million.

DAYS ON THE MARKET Overall, Santa Cruz County homes are on the market about 45-50 days on average before going into escrow with a buyer.   This is about 2 weeks longer than last year.  I think this is because recently, some sellers have been tempted to price their homes too high, but then have to adjust downward after waiting but getting no offers.    Competitively priced and affordable homes are still selling quickly with multiple offers.   Right now, Santa Cruz County has 378 homes for sale (versus 396 around this time last year).

REAL ESTATE MARKETS ARE LOCAL!   The advice of a knowledgeable local REALTOR® who can show you the trends in your neighborhood and your specific kind of property and price range is invaluable.   Different communities and different price ranges don’t move in synch.  The price a buyer should offer, or the price a seller should list their property for, takes not only in-depth research but also field knowledge.   Buyers or sellers should choose their REALTOR® carefully: consider if an agent will have enough time to dedicate to you, in addition to someone who knows the area well and perhaps even lives nearby.

INTEREST RATES    The Federal Reserve met this week;  their meeting minutes say the economy is on track for modest growth with minimal inflation (under 2%).   ¾ of voting officials appeared to be in favor of raising interest rates in December.    30 year home mortgage rates rose ever so slightly to about 4%, depending on personal factors.

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 where property values can range between multi million dollar properties and fixer upper sales.  Because of this,  percentage and average price changes aren’t statistically meaningful for a static 30 day period.      *All stats as of 9/15/17, MLSListings.com single family residences only.

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Santa Cruz Home Prices, Scotts Valley and SLV Home Prices, 2nd Quarter 2016

Here is a summary of San Lorenzo Valley, Los Gatos Mountains, Scotts Valley and Santa Cruz home prices.

Q2_2016_Santa_Cruz_County_SLV_SV_SC_statsPRICES   Average single family home prices in Santa Cruz County rose about 1% during the second quarter of 2016, following an increase of about 10% during the first quarter.     Some communities and price brackets remain “hot” with multiple buyers pursuing a limited number of homes.     The San Lorenzo Valley continues to be one of the most affordable regions in Santa Cruz County, with home prices at about 66% of the county average.

INVENTORY    The main issue facing the market is still too few homes for sale.    San Lorenzo Valley only has 49 single family homes for sale (versus 48 at the end of the 1st quarter).    Scotts Valley: 46 (41).   Los Gatos Mountains, 26 (29).    In contrast, the City of Santa Cruz has nearly twice the number of listings right now at 43 (26).

DAYS ON THE MARKET Santa Cruz County homes are on the market for about 25 to 32 days on average now before going into escrow with a buyer.  Well priced and particularly the most affordable homes are still selling quickly with multiple offers, but some upper middle to higher end listings are lingering on the market.   I believe part of this is because home prices are less affordable now for many entry level buyers.   It’s the entry level buyer that in many cases triggers current home owners’ ability  to buy a larger or better home, so it’s an inevitable chain reaction in my opinion.       Santa Cruz County now has 396 homes for sale in (compared to only 288 homes in the first quarter).

SILICON VALLEY Santa Cruz County is influenced by real estate conditions in the Silicon Valley.    In Santa Clara County, single family homes started 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, holding relatively steadily through the end of July.

SANTA CRUZ COUNTY’S APPEAL Besides the obvious appeal of our relatively lower home prices, many people from the Silicon Valley are enchanted by our beaches, numerous state parks, smaller cities and towns … The Santa Cruz lifestyle also conveys benefits like lower stress, crime rates and smog. I often hear people say they would rather commute through the mountains than sit in traffic and spend more money to live “over the hill.”       Right now I’m working with a first time home buyer who works “over there”, an investor who’d rather not pay rent for their UCSC-bound post-grad student, and some retirees who simply love it here.       The sellers I’m currently working with are retiring to mountains and lakes elsewhere.

TECHNICAL ANALYSIS – IS SANTA CRUZ COUNTY APPROACHING A REAL ESTATE BUBBLE?

Real estate typically moves in about 7-10 year cycles.    Here, we started to see appreciation around 2011, after the low in 2009.     Analysts are looking carefully at metro areas across the country to see if there are any bubble conditions yet.    Some of the factors that lead to bubbles include price appreciation that’s faster than wages and rents: San Jose and San Francisco arguably fall in this category.    On the other hand, mortgages have been difficult to obtain during this cycle, and renting is very expensive, so my feeling is the likelihood of default is pretty low.   Finally, population and jobs are growing faster than the rate of new construction throughout the Bay Area.     My hope is that this cycle functions more normally, moving toward price stability.   That’s how I interpret Santa Clara and Santa Cruz County home price comparisons between the first and second quarters this year.

The two sets of charts below illustrate this bit of a pause in the market right now:   A normal market, balanced between buyers and sellers, has about 6 months’ worth of housing inventory.   Santa Cruz County had about 2 ½ months of inventory at the beginning of the year.     Right now, there is about 3 ¾ months of inventory county wide, still in favor of sellers.    You can also see this is one of the factors that drove prices upward.  Now that there are more homes to choose from, prices are a bit subdued.     If this trend continues, it may increasingly favor home buyers.

SCC_Months_of_Inventory5_years__2016-07-25

SCC_Months_of_Inventory_2016_as_of_07-25

Next, you can see a correlation between months of inventory (a measure of supply and demand), and prices:

SCC_Sales_Prices_5_years_as_of_2016-07-25

Next: Santa Cruz County real estate price trends so far this year:

SCC_Sales_Prices_2016_as_of_07-25

REAL ESTATE MARKETS ARE HYPER LOCAL!   Nothing can replace the advice of a local and knowledgeable REALTOR® who can show you the specific trends in your neighborhood market and your specific price range.   Different communities and different price brackets definitely do not move in tandem. The question of how much a buyer should offer, or what price a seller should list at, takes in-depth research and knowledge!   Buyers or sellers should choose a REALTOR®who knows the inventory well and can knowledgeably compare a home’s asking price to other recent home sales.    I believe the best way to serve both my buyers and sellers is by consistently touring properties, talking to other agents, and tracking the final sales prices.

INTEREST RATES Given the weakness in the global economy, compounded by the uncertainty of “Brexit,” many think the Federal Reserve will pause and let the market absorb their first increase in interest rates in a decade last December.    Right now the market is expecting at most one more increase this year.   Most buyers are still able to get mortgage rates in the high 3% to low 4% range, depending on personal factors.

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 appeal to the most buyers.    My customized marketing plan is exceptional: contact me to discover why I have so many repeat clients.

Looking for your dream home?     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!

*Statistically, these communities had too few home sales for the percentage changes to be meaningful.

Sources:  MLSListings.com (Single Family Residences), Reuters, Inman News, REALTOR.org, ActiveRain.com, Mercury News

 

Santa Cruz Real Estate Prices 2016

Here are the latest real estate prices around Santa Cruz County for the first quarter of 2016

Santa_Cruz_Real_Estate_Q1_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.

SCC_Sales_Prices_5_years_as_of_2016-04-14SCC_Months_of_Inventory_2016-04-14

CA_has_12_of_the_top_20_hottest_markets_in_the_US

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

SCC_Sales_Price_to_List_Price_2016-04-14.pngSanta_Clara_Sales_to_List_Price2016-04-14.png

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