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San Lorenzo Valley Real Estate Prices – 2012 in review

San Lorenzo Valley Home Prices and Sales – 2012

The real estate market in the San Lorenzo Valley turned in a solid performance for 2012, with an average home sales price of $338,238, up 5% on average for the year.

SLV Home Prices

The key factor affecting home sales right now is a lack of inventory – the number of homes for sale is at an eight year low!    Yet, there are many buyers, including cash investors and first time buyers who want to lock in great interest rates.     The imbalance of supply and demand leads to competition, and that supports increasing prices.

A new home listing, priced properly and marketed well by your agent, is likely to get multiple offers, even over asking price.    There just aren’t enough homes on the market to match buyer demand.  Another measure of demand: Days on the market (before the house goes into escrow) is about 2-3 months, putting us solidly within what’s known as a sellers’ market.

SLV housing inventory 2012 by month

If you are contemplating putting your house on the market, there’s pent up demand right now!    Look at the typical upward swing in inventory during the summer months in the chart– is there really a reason to wait to list your property?    To find out what your San Lorenzo Valley home is worth now, click here

The Santa Cruz Mountains and San Lorenzo Valley are influenced by the hectic Silicon Valley and greater Bay Area markets which experienced rapid appreciation in the range of 20% during 2012.

Felton fields and clouds, photographed by John Urwin
Felton fields and clouds, photographed by John Urwin

With gas prices a bit lower lately, more working people are willing to make the 30-45 minute commute from the San Lorenzo Valley.   They feel it’s a great trade-off because they can come home to more affordable homes and a more relaxed lifestyle, with less crowding and more open spaces.  For the average price of $340k, buyers got a 3 bedroom, 1200 square foot home on lots averaging 1/4 acre or more!

Santa Cruz Mountains: Location, Location, Location!

Earlier this week I took the day off to enjoy a walk along Pleasure Point, dropping

Pleasure Point Egret
Pleasure Point Egret

occasionally down to the beach to look at the tide pools, then back up to street level where people were skateboarding and walking their dogs, enjoying the sunshine.   During dinner on the wharf in Santa Cruz, we watched the pelicans diving for fish, against the amazing backdrop of sunset and ocean.   Returning back home to the San Lorenzo Valley in the evening took less than half an hour, and I again felt so blessed to be living in such a diverse and gorgeous place.

Mortgage rates for a 30 year fixed loan continue to average well below 4%, allowing people to secure their future housing costs.   First time buyers are a big portion of the market, because renting costs just about the same as owning.   Investor buyers are a big factor as well, often defeating first time buyers in competition, because they are putting down a lot of cash – often buying homes with no loan at all.   Understanding the challenges involved in getting a loan, many sellers will choose a cash buyer if they have the option.   Buyers making a down payment of 3.5% or less may find themselves loosing in competition to buyers with a larger down payment, if the seller can choose amongst multiple offers.

2012 –year in review

299 homes sold in the San Lorenzo Valley – from Boulder Creek to the town of Felton (according to the Multiple Listing Service, areas 34-37).    The volume of sales is up about 16% this year compared to last, and the average sales price is up about 5% to $338,238.     (vs. $321,555 average price on 256 sales in 2011.)

In 2012, 46 homes sold for over $500,000, almost double the number in 2011, when just 26 homes had sold for over $500,000.

At the high end of the spectrum, two homes this year sold for $875,000 – one in a good Boulder Creek neighborhood and one in Felton – both were on acreage.

At the bottom end of the spectrum, 8 homes sold this year for less than $100,000 – all had serious deficiencies and would not qualify for a loan.

Distressed sales were still a big factor in the 2012 housing market in the Santa Cruz Mountains, particularly dominating the lower price range.  75 short sales and 76 foreclosures (REOs) caused about  50% of sales to be distressed properties.   It’s possible that there will be more short sales and fewer foreclosure sales in 2013.   This is in part because lenders have learned that unoccupied homes fall apart – loosing value quickly-  so they are seeing short sales as more advantageous.   For buyers, short sales are taking less time to get approved, so the risk is less than before.

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Real Estate Prices in the San Lorenzo Valley – October 2012

San Lorenzo Valley Home Sales through Oct 31, 2012

As tendrils of wood smoke curl lazily above homes in San Lorenzo Valley this chilly November morning, the day after the election, it’s time for me to share my reflections on our real estate market.   Rising home prices in the Silicon Valley continue to boost our local housing recovery.  Recently I helped some first time buyers secure a home in Felton, after being beaten out over and over by 20-30 offers on homes “over the hill” as we say.

Santa Cruz Mountains

We are just loving the beautiful weather here this fall: chilly in the morning, warm and sunny in the afternoons, with the promise of rains right around the corner.   We are so close to wonderful beach towns like Santa Cruz and Capitola, and within commute range to Silicon Valley jobs.   These factors combine with still relatively affordable prices to support continuing stability with hints of growth in the San LorenzoValley housing market.

A new home listing, positioned properly in the under $300,000 segment, is likely to get multiple offers, often over asking price.    There still aren’t enough homes on the market to match buyer demand.

Chart showing low inventory of homes in the San Lorenzo Valley

Days on the market (before sale) – another measure of demand –  are shorter: anything below 6 months inventory is considered a sellers’ market.

One of our biggest challenges as the market recovers is appraisals.    I think the lending risk pendulum has swung too conservative, too late.    Government intervention into the appraisal process inserted a middleman into the system, increasing the cost for borrowers and taking money from the appraisers.   Consequently, many experienced appraisers left the business; those that are left are working harder for less money.    Some are not spending the necessary time to research for suitable comparable properties, resulting in appraisals not coming in at the market value negotiated between multiple buyers’ offers and the seller.

Mortgage rates for a 30 year fixed loan continue to average well below 4%, allowing people to secure their future housing costs.   First time buyers are a big portion of the market, as rental costs continue to increase.   Investor buyers are a big factor as well, often defeating first time buyers in competition, because they are putting down a lot of cash – often buying homes without any loan at all.   Understanding the difficulties in lending, many sellers will choose a cash buyer over one needing a loan if they have multiple offers.

2012 –year to date

241 homes have sold in the San Lorenzo Valley – from Boulder Creek to the town of Felton – so far this year (according to the Multiple Listing Service, areas 34-37).    The volume of sales is up about 15% this year compared to last, and the average sales price is up about 4% to $341,868.

Single Family Home Prices in the San Lorenzo Valley – 2012

35 homes sold in October, and the average home price for the month of October rose to $386,269.    (June’s average was $371,714).   The average sales price for the month of October rose nearly $100,000 from October of last year at $288,982.   It’s critical to understand this increase in average prices is due to a much higher proportion of sales occurring in the upper price ranges in this last month….It’s not as if all homes have increased that dramatically in value!

So far this year, 38 homes sold for over $500,000, compared to last year when only 26 homes had sold for over $500,000.

At the high end of the spectrum, two homes this year sold for $875,000 – one in a good Boulder Creek neighborhood and one in Felton – both were on acreage.

Are we out of the woods yet?  No.   Right now I’m working on escrows for 3 short sellers, a buyer of a foreclosure, and one traditional sale on acreage.   In the first ten months of 2012, of the 241 San LorenzoValley closed escrows,  56  were short sales, and 63 foreclosures (REOs).     The percentage of distressed property sales was 49.3% (compared to 50% in June).

At the bottom end of the spectrum, 6 homes sold this year for less than $100,000 – all had serious deficiencies and would not qualify for a loan.

2011 –year to date  (January 1st through October 31st)

By October of last year, 209 homes had sold in the San Lorenzo Valley.     The average home price was $328,790 for the first ten months, and 129 of the homes sold were distressed sales, or 62%.   26 homes sold for over $500,000, while  9 homes sold for less than $100,000 by this time last year; again none were habitable and had to be sold for all cash, since no lender would touch them. 

To find out more about San Lorenzo Valley homes, click here

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California Real Estate Recovery

California  Home Prices and Home Sales are improving (June 30, 2012)

June sales volume was 8.5% higher, compared to June 2011.

June’s median price was $320,540 – up 8.1% compared to $296,410 recorded in June 2011.

If you or someone you care about has been sitting on the sidelines, uneasy about prices, read this next sentence:

The June 2012 median price for a single family detached home was 30.7% higher than the cyclical bottom of $245,230 reached in February 2009.

California’s housing inventory of unsold single-family detached homes stayed level at just 3.5 months’ inventory.   This index indicates the number of months needed to sell the supply of homes on the market at the current sales rate.  A 6-7 month supply is considered to be normal and balanced equally between buyers and sellers; California is in a sellers’ market.

Source: California Association of REALTOR®S

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CNN Money reports – Buying a Home may Never get any Cheaper

Buying a home won’t get much cheaper

By Les Christie @CNNMoney May 3, 2012: 11:48 AM EST

Several housing experts are predicting that this year will be the last chance for homebuyers to cash in on the weak housing market.

NEW YORK (CNNMoney) — Buying a home may never get any cheaper than this. Several housing experts are predicting that this year will be the last chance for bargain hunters to cash in on the best deals of the weak housing market.

With home prices down 34% nationally since 2006 and mortgage rates at historic lows, homes have never been more affordable — but it won’t stay this way for much longer.

Stuart Hoffman, chief economist for PNC Financial Services (PNC,Fortune 500), said he expects home prices to flatten out by the third quarter and start climbing by next year.

A number of factors will help bolster the housing market, he said, including a decline in the number of foreclosures and continued job growth. In addition, homebuyers will have better access to mortgages as they get their finances in order and improve their credit scores.

Some economists, like Trulia’s Jed Kolko, expect home prices to pick up even more quickly. Trulia’s data shows that the national average for asking prices already increased 1.4% in the first quarter of 2012, compared with the last three months of 2011.

“This is a strong indicator that we will start seeing home price indexes, like the S&P/Case-Shiller, start to report home price increases this summer,” he said.

Prospective homebuyers who’ve been sitting on the fence shouldn’t worry if they aren’t quite ready to make the leap. Analysts are predicting that the initial price gains will be modest, at least, in most markets.

Hoffman, for example, is forecasting a 2% increase in 2013 compared with 2012. Meanwhile David Stiff, chief economist for Fiserv, predicts that prices will turn in the last quarter of 2012 and will rise 4.2% for the 12 months through September 2013.

Foreclosures start to fade. One major factor that will drive the trend is the cooling of the foreclosure crisis. Stan Humphries, chief economist for Zillow, said that the percentage of mortgage loans 90 days or more late, a good predictor of future foreclosures, is “falling fast.”

That percentage dropped 15% year-over-year to 3.1% through the end of 2011, according to the Mortgage Bankers Association. And the decline is accelerating: More than 70% of the decline came in the last three months of the year.

Before things slow down, however, buyers should brace themselves for a temporary spike in the number of foreclosures as banks start expediting the processing of hundreds of thousands foreclosures that were stuck in the system following the robo-signing scandal. That backlog should move more quickly now that new guidelines for processing foreclosures have been outlined in the $26 billion foreclosure settlement.

Many of the bank-owned properties currently coming out of the foreclosure pipeline are being snapped up by investors who are fixing them up and renting them out — often to those who were displaced by the foreclosure of their own home. That has helped to lift prices on foreclosed properties, according to Alex Villacorte, the director of analytics for Clear Capital, which specializes in housing market valuations.

“That could have a significant impact on the market overall in terms of providing a rising floor to home values,” he said.

In some markets hit hard by foreclosures, the turnaround in prices is already underway. Phoenix recorded an 8.4% jump in home prices during the three months ended April 30, compared with the three months ended January 31, according to Clear Capital.

“It’s crazy,” said Tanya Marchiol, founder of Team Investments, a Phoenix real estate investing firm. “Stuff I was selling six months ago for $60,000 to $80,000 is now $90,000 to $110,000.”

Miami saw a 4.6% increase quarter-over-quarter through April, andTampa, Fla., was up 4.4%, according to Clear Capital.

Goodbye 3.8% mortgage. In addition to home prices, mortgages could also move higher.

Mortgage rates have been at or near historic lows for much of the past six months. The average interest rate for a 30-year, fixed-rate mortgage has not topped 4.5% since July 2011 and this week, it hit 3.84%, a new low.

But rates aren’t expected to remain at these record-low levels much longer. As the economy continues to recover, rates will move higher, said Doug Lebda, CEO of LendingTree, the online lending site. Although, he said, they will “stay very reasonable.”

The Mortgage Bankers Association is forecasting that the 30-year fixed will hit 4.5% by the end of the year.

Greater demand for loans will help fuel the increase, according to Lebda.

Even though mortgage rates have been cheap, borrowing for home purchases has been sluggish. The Mortgage Bankers Association estimates that homebuyers will take out mortgage loans totaling about $415 billion this year, an increase of less than 3% compared with 2011. Next year, however, it forecasts that amount will almost double to $706 billion.

As housing markets stabilize and prices stop falling, homebuyers will be even more confident about buying, said Humphries.

“People can now see the light at the end of the tunnel,” he said. “And that can be enough to get them off the fence.” To top of page

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National Home Sales Update

Home Sales rose again nationally,

       showing the 3rd gain in the last 4 months, while inventory shrinks

The average home price in the Western Region fell just 2% year over year.    The median price of a single family home across the nation was $154,400, down 2.6% from January 2011.    

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Inventory, or the number of homes sitting unsold on the market, shrank to just over 6 months.   This is a key indicator, since a market balanced between and equal number of buyers and sellers tends to hover around 6 months supply.       Inventory is down 20% from a year ago.

All cash sales have steadily accounted for 31% of sales.   There are a lot of investors moving their cash into real estate, picking up rental properties and vacation homes.

Foreclosures accounted for 22% of January sales.

Short sales tallied up 13% of total January sales.   One of my short sale listings just went into escrow after getting 4 all cash offers over asking price.   3 of the 4 buyers wanted to live there themselves.

To read more, turn to http://www.realtor.org/press_room/news_releases/2012/02/ehs_jan

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San Lorenzo Valley Housing Market Update 2011

Boulder Creek, California

This market report focuses on the towns of Boulder Creek, (above), Brookdale, Ben Lomond, and Felton, all situated in the San Lorenzo Valley region of the Santa Cruz Mountains.

For the 4th Quarter 2011: Home Sales Rose; Prices fell

87 homes sold in the 4th Quarter of 2011, at an average price of $286,000  The most expensive home sold for $682,000; the least expensive $44,000.    Only 7 homes sold for more than $500,000; 22 homes sold for less than $200,000.

70 Homes sold in the 4th Quarter of 2010, at an average price of $360,000.   The most expensive home sold for $750,000; the least expensive $28,000.    14 homes sold for more than $500,000; 15 homes sold for less than $200,000.

If you are a buyer in the under $300,000 price range, prepare for steep competition from other buyers!    Most of these entry level homes are getting multiple offers – all from buyers with updated pre-approval letters from lenders – some offering all cash and no loan contingency.   Click here for help finding your dream home in the San Lorenzo Valley.

If you are a seller, prepare to have your home compared to distressed properties.    Have an agent walk through your property prior to putting it on the market: they can give you economical tips to bring out your properties best features, and advise you of the likely price range today’s value conscious buyers are willing to offer you.    Click here to discover what your home is worth.

If you are a homeowner in distress, please don’t wait until the last minute to contact a REALTOR.    We have the tools to help you minimize your credit damage, and in many cases can even get you money to help you relocate from your underwater home.

For the year 2011, Home Sales Rose; Prices fell.

The market was dominated once again by distressed sales.   115 of the 253, or, 45% of the homes sold were foreclosures, and 40 (16%) were short sales.   Only 42% were noted on the MLS as ordinary sales.   13 homes sold for $100,000 or less, but only 12 homes sold for over $600,000.

While about the same number of homes sold for under $100,000 this year as last year, the number of higher priced homes (above $600,000) dropped dramatically  – just 12 this year versus 22 last year.    This is what dragged the average price down, compared to 2010.  

During 2011, 253 homes sold, at an average price of $320,779.     The median price was $307,900 – meaning half of the homes sold for less, and half for more.    The highest price home sold in 2011 for $875,000: This was a farmhouse  situated on 27 gorgeous acres bordering Fall Creek State Park.   The lowest priced home sold for $44,000: this was a burned down, foreclosed home sold at auction.    The average days it took a home to go into escrow was stable at 93 days.

In 2010,  82 of the 234 homes sold were foreclosures, and 41 were short sales, so 53% of sales were distressed.    The average price was $373,200; the median was $372,000.    The highest price home sold for $800,000, while the lowest price home sold for $28,000.    12 homes sold for less than $100,000, while 22 homes sold for over $600,000.     The average time on the market before a home went into escrow was 97 days.

http://maps.google.com/maps/ms?msa=0&msid=214168273664459341077.0004b593ef6478646643d&hl=en&ie=UTF8&t=h&vpsrc=0&ll=37.107765,-122.110977&spn=0.262849,0.439453&z=11&output=embed

Building A Bridge to Your Future

M.C. Dwyer, MBA, REALTOR, Century 21 Showcase REALTORS

(831) 419-9759

http://www.Santa-Cruz-Mtns-Homes.com copyright 2012

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Home Prices rose in the Western Region of the US in 2011

Median home prices rose .3% in 2011 across the Western Region of the United States.   Nationally, sales are at an 11 month high.     While the number of sales fell .8% for the western region, nationwide, single family home sales rose 1.7% for the year.

Importantly, the supply of unsold homes on the market has fallen to a 7 year low, to about 6 months.     A 6 month inventory is considered to be balanced.    When the inventory rises above six months, prices can fall.

The jobs market has shown positive signs of improvement, as unemployment has fallen to about 8.5%.     The number of unsold homes is the lowest it has been since April 2005.    Another key sign is builder confidence, which is at the highest it’s been in about 4 years.

Nationwide, distressed sales continued to account for about 1/3 of all sales, which will continue to be a damper on prices.

CashNearly 1/3 of all home sales across the nation were all cash transactions.   Investors accounted for 21% of sales, with first time buyers at 31%.

If you are a buyer who needs a loan to finance your purchase, be prepared to write a competitive offer.   I can help advise you on ways to make your offer attractive in a multiple offer situation, which we see frequently particularly on those under $200,000.

Yet, recently in Santa Cruz property, we’ve seen well-priced desirable homes in the $3-400,000 range get multiple offers as well.

Building A Bridge to Your Future

M.C. Dwyer, MBA, REALTOR, Century 21 Showcase REALTORS

(831) 419-9759

http://www.Santa-Cruz-Mtns-Homes.com copyright 2012