San Lorenzo Valley, Scotts Valley and Santa Cruz Real Estate Market: Year End 2019

4th_Qtr_2019_Avg_Prices_as_of_010620

SUMMARY:

Santa Cruz County average single family home prices eased about 3% during the 4th quarter, versus the 3rd quarter, but, prices were just 1% lower than this time a year ago.    The number of homes sold was about equal to the number sold during the same time period last year.   To quote my year end 2018 blog, “After consecutive years of double digit price appreciation, I consider this softening healthy for the overall housing market, although … disconcerting to home sellers.    Real estate is cyclical; the last trough in prices was …in 2009.    No one wants a repeat of the “great recession;’ a soft landing is preferable.”     On average across Santa Cruz County, it takes about 8 weeks for a home to go into escrow with a buyer now, (“Days on Market”), a trend that’s been lengthening every quarter.  Days on market was just three weeks back in early 2018.

Santa Clara County was remarkably solid, with 4th quarter average home prices easing just 1% compared to the 3rd quarter – but up 1% year over year and holding steadily at $1.5 million.    The number of home sales has slowed though, while the time it takes for a home to go into escrow – has increased to about a month, compared to just two weeks back in early 2018.

San Lorenzo Valley 4th quarter average home sales prices continued the softening trend that started in the middle of 2018 after average prices at $705,000.    We’re looking at about a 7% decline, spread out evenly over the last year and a half.     86 single family homes sold across the SLV, down from a recent peak of 142 in the 3rd quarter of 2017.     Although multiple offers still happen, often just a few buyers are competing.      On average, SLV homes sold for 98% of list price.    It took about 44 days on average for homes to go into escrow last quarter – nearly two weeks longer than last summer.

Note:  As you look at the price chart, keep in mind 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 even when viewed over a quarter.    It’s more useful to look at the San Lorenzo Valley as a whole.

Scotts Valley 4th quarter average home prices fell about 10% from the 3rd quarter because only two homes sold for over $2 million.   That drop was compared to five home sales over $2 million in the 3rd quarter and seven in the 2nd quarter.   About 10 fewer homes sold versus the previous two quarters.

Los Gatos mountains region 4th quarter average home prices bounced back from the 3rd quarter as I expected.  The 3rd quarter had an anomaly: fewer home sales in the $1 million plus bracket plus more fixer uppers.    During the 4th quarter, the region had 16 home sale prices over $1 million and 2 over $2 million.

The City of Santa Cruz saw average 4th quarter home price declines of about 6% during the 4th quarter, taking prices back to where they were in 2017.   The number of homes sold declined also…city politics plays a role, but that’s beyond the scope of this review.

California’s November statewide results according to the California Association of REALTORS:  median home prices fell 1.5% during the month to $589,770.    Still, median prices were up a healthy 6.4% for the year: the November 2018 CA median house price was $554,240

 

AFFORDABLE HOMES NEAR THE SILICON VALLEY:

Since average single family home prices continue to range between $1 to $1.5 million across Santa Cruz County, Santa Clara County and the greater San Francisco Bay Area, people working in the Silicon Valley are delighted to discover affordable housing in the San Lorenzo Valley –  within 45 minutes to an hour’s commute to high tech employers like Apple, Alphabet (Google), Facebook, etc..        Towns in the San Lorenzo Valley offer a more relaxed, rural lifestyle at about half the price of neighboring Scotts Valley, whose residents do enjoy more conveniences and the services of a small city.   Santa Cruz home prices have been stable at just over $1 million, where residents enjoy a variety of parks, beaches, great restaurants, night life, and shopping in this city of about 60,000 residents.

 

INVENTORY:

Months_of_Inventory_2020-01-06

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 one ½ to two months of inventory; about a month less than this time last year.   That means, at the current rate of sales, we’d run out of homes for sale in just two months.

Scotts Valley has just 9 single family homes for sale (vs. 39 in the 3rd quarter & 51 2nd quarter), compared to 24 homes for sale at this time last year.      San Lorenzo Valley has just 36 single family homes for sale right now, compared to 40 at this time last year.    During the summer of 2019 there were around 80 homes for sale in the SLV. Santa Cruz, despite having four times the population of Scotts Valley, has 24 homes for sale (vs. 63  in the 3rd quarter & 72 in the 2nd quarter), compared to 38 at this time last year.

While some sellers take their homes off the market over the holidays and relist them in spring, creating seasonal lows every January, these graphs show that we’re is experiencing an inventory shortage beyond just that seasonal pattern.     So, listing a home for sale early this year might mean beating the competition when the normal rush of sellers list their homes when the weather improves later this spring.

 

ECONOMY & MORTGAGES:

CoreLogic reported September’s overall mortgage delinquencies remain at their lowest rate in 20 years nationally, and foreclosures also remain at their lowest rate for 20 years.    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.

Talk of recession has become more common lately, and, some fear global forces including trade wars, political upheavals, stock markets at new highs and the fact the US economy is in its longest expansion ever.     On the other hand, CoreLogic notes the number of homeowners that were underwater on their mortgage fell 10% last year.    Just 3.7% of all homes have negative equity now; the average US homeowner gained over $5,000 in equity during the last year.

National economic figures:  growth as measured by GDP (Gross Domestic Product) was 2.1% during the 2nd and 3rd quarters of 2019, (down from 3.1% during the 1st quarter of 2019, and level with 2.2% in the 4th quarter of 2018).     Consumer price increases (a measure of inflation – something the Federal Reserve monitors closely) measured 2.1% in November (1.7% in August, 1.8% in May, 1.5% in January and considerably lower than the 2.9% in July 2018).    The unemployment rate remains steady at about 3.7%     (3.7% nationwide in January 2019).    Wage growth was stable at a 4% rate (but down from 4.5% during third quarter 2018).

Mortgage interest rates – today the 30 year mortgage rate averaged 3.7%, providing ongoing support to the housing market.    Last year at this time the 30 year average rate was 4.6%.     These rates are historically incredibly low and very appealing to home buyers.     Many homeowners can benefit from refinancing – consult your loan professional, or reach out to me if you need references to excellent local lenders.

 

SANTA CRUZ COUNTY’S APPEAL:

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.    We enjoy so many 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 here have high speed internet, and more companies allow 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, and can recommend solid local home service providers 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.

Minolta DSC
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, 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 January 6th 2020:  MLSListings.com single family residences.

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.

Minolta DSC
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.

Santa Cruz real estate market update: year end 2018

Santa Cruz, Scotts Valley and San Lorenzo Valley

Real estate market update: 4th Quarter 2018

4th_qtr_2018_avg_prices_010219

SUMMARY:

Just as I reported in the 3rd quarter, the 4th quarter trend reflected continued price softening.     After consecutive years of double digit price appreciation, I consider this softening healthy for the overall housing market, although it is certainly disconcerting to home sellers.    Real estate is cyclical; the last trough in prices was nearly ten years ago in about 2009.    No one wants a repeat of the “great recession;” a soft landing is preferable.

As you look at the price 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 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 9 percent over the 4th quarter of last year.    Scotts Valley rose in tandem with Santa Clara County at 13% and 14% respectively, while Santa Cruz County as a whole rose 7% for the year.   Nationally, home prices appreciated just over 5% in 2018.

INVENTORY:

months_of_inventory_2019-01-02

These charts illustrate housing inventory over the past three years.   Around six months housing inventory is considered balanced between buyers and sellers.   Some sellers take their homes off the market over the holidays and relist them in spring, creating seasonal lows every January.   But these graphs show that each region is experiencing a continuing inventory shortage that is beyond just that seasonal pattern.     So, listing a home for sale early this year might mean beating the competition when the normal rush of sellers list their homes in late spring.

At the time of this writing, San Lorenzo Valley had only 40 single family homes for sale (down from 80 last quarter but similar to the beginning of 2018).     Scotts Valley has 24 homes,  (down from 32 last quarter), while Santa Cruz, despite having four times the population of Scotts Valley, has just 38 single family homes for sale, (down from 68 last quarter).

ECONOMY

As widely expected, the cost to borrow went up again in December as the Federal Reserve steered the economy by increasing Fed rates to 2.5%.   Economic growth as measured by GDP fell to 3.4% in the 3rd quarter (4.2% in the 2nd quarter of 2018).    Consumer price increases (inflation) fell to about 2.2% (from as high as 2.9% in July 2018).    The unemployment rate declined to a very low 3.7% nationwide.    Wages still haven’t increased as much as workers would hope, but are up around 4.5 – 5% this year.

Concerns of a global economic slowdown, combined with these mostly softer US numbers, may lead the Federal Reserve to slow down the rate of future interest rate increases.     The yield curve (which charts the yield of T-Bills through 30 year treasury bonds) has been threatening to invert, which is often a precursor of a recession.   As a result, the rate on 30 year mortgages has fallen from almost 5% back to 4.6% as of 1/4/19.    Click here to see today’s 30 year fixed rate mortgages rates,

SILICON VALLEY HOMES  

With an average single family home price of $1 million 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 continues to sparkle with some of the most attractive prices anywhere in the greater bay area and 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 other amenities.

PRICES

The average Santa Cruz home cost of $1.1 million could buy for example, a picturesque restored Victorian 3 bed 2 bath near downtown, or, a 2 bedroom lower westside home with a legal accessory dwelling unit midway between Mission and West Cliff.     The Scotts Valley average home price of $1.3 million could buy a 4 bedroom, 3 ½ bath 15 year old home near the high school, or for a more rural experience, a 3,000 square foot 1980’s home plus guest house on 3 acres a few miles from town.   The San Lorenzo Valley average home price of $685,000 could buy for example a 3 bed/2 bath home built in 2000 on about an acre about 2 miles outside of Boulder Creek, or a 2 bed/2 bath with a small studio built in the 1970’s on about 2/10 acre in Felton.

DAYS ON THE MARKET

In contrast to Santa Clara County homes, which sold on average within the first month of being listed, San Lorenzo Valley homes take on average 60 days to sell: some will sell within the first week or two, while others will take longer than a couple of months to find a buyer.     At 39-40 days, Scotts Valley and Santa Cruz city homes typically took 10 days longer than a Silicon Valley home to sell.    Across the board, homes took about a week longer to sell in the 4th quarter of 2018 than they did in the 4th quarter of 2017.

SANTA CRUZ COUNTY’S APPEAL

People from the Silicon Valley are enchanted to discover Santa Cruz County: parks for hiking, climbing, horseback riding, mountain biking, and skateboarding.    There are dozens of beaches, from popular to serene, walk-in to hike-in.   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 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.  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.

Minolta DSC
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.     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 January 2, 2019:  MLSListings.com single family residences.

Santa Cruz mountains Real estate market update 3rd Quarter 2018

Santa Cruz, Scotts Valley and San Lorenzo Valley

Real estate market update

3rd Quarter 2018

Q3_18_PRICES

SUMMARY:  Home prices began to soften in some communities over the last quarter.   Still, prices are higher than this time last year across the majority of areas.    Since there are more homes for sale now compared to this spring, homes are taking about a week longer to sell in Santa Cruz County.   Still, there aren’t enough homes for sale compared to the number of buyers looking.    In addition to location and amenities, buyers tend to be concerned about locking in low interest rates and avoiding unexpected repair costs.

Sellers are most concerned about prices, the timing of buying while selling, and moving to their next house.   Talking to my clients, some people say they would sell, if they could only figure out where to retire affordably.    Call me, I’ve been doing research on this exact question!  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.

Q3 18 Housing Inventory Graph

INVENTORY

These charts show the region’s inventory is increasing as more homes come on the market across the region with fewer buyers pursuing them.   As an example, two months of inventory means that if no new homes were listed, all the homes on the market would sell within two months.    We’re still in a sellers’ market.    The housing shortage persists: inventory ranges between a low of 2 months in Santa Clara County to a high of 3.5 months in the San Lorenzo Valley.     Although the housing shortage keeps upward pressure on prices, the rate of price increases is slowing as the market transitions into a more normal balance between buyers and sellers.   This trend could continue as we move into the fall and then the holiday season.   A real estate market that’s balanced between buyers and sellers usually has around six months of inventory.

San Lorenzo Valley has about 80 single family homes for sale (up 10 since last quarter and more than double the number for sale at the beginning of the year).     Scotts Valley has 32 homes (down from 37 last quarter), while Santa Cruz, despite having four times the population of Scotts Valley, has just 68 single family homes for sale, (down from 80 last quarter).

ECONOMY

As widely expected, the cost to borrow went up again last week as the Federal Reserve steered the economy by increasing Fed rates to 2.25% due to consistent economic growth (4.2% in the 2nd quarter of 2018), and consumer price increases around 2.9%.    The unemployment rate remains low at about 3.9% nationwide.    Wages still haven’t increased as much as workers hope, but are up around 4.5 – 5% this year.

Click here to see today’s 30 year fixed rate mortgages rates, averaging 4.7% at the time of this article.  The Fed is widely expected to increase rates once more in 2018, typically at 0.25% each time, unless there’s a global economic disruption.   Many experts think mortgage interest rates around 5% may soon be normal.    (Historically, this is still considered low).

SILICON VALLEY HOMES  continue to appreciate but at a slower pace lately:  around 3% over the last two quarters, compared to previous quarterly price appreciation rates of 8%.   Home price averages remain around $1.5 million.    To find an affordable home, many buyers have to cast a wider net, yet want to stay 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 remained around $700,000 between Boulder Creek and Felton, (San Lorenzo Valley: SLV).   Even though housing is less than half the cost of the Silicon Valley, SLV remains relatively unknown despite its variety of relatively affordable homes for Silicon Valley’s employees.    Ben Lomond enjoyed the strongest rate of appreciation this last quarter, with 5 home sales over $1 million, while the Lompico region was the lowest.

Prefer city amenities?   Scotts Valley offers 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 about $1.2 million.      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, at about the same price range of $1.13 million.   In the city of Santa Cruz, home prices were nearly flat … Similarly, Los Gatos Mountains average prices were essentially flat to slightly lower.

If you’re looking in the under $600,000 price range, (often a 2 bedroom home on about a ¼ acre of sloped land, or perhaps a condo in the cities),  expect to compete with investors and first time buyers.  If you’re my client, I’ll share a few tips with you – things you haven’t 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 shopping 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.

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   Homes across the Silicon Valley spend an average time on market of about three weeks now (compared to under two weeks last quarter).   Santa Cruz County homes are on the market about a month before going into escrow (versus 3 weeks last quarter).  The Santa Cruz area still experiences overflow pressure from the Silicon Valley.   Affordable Santa Cruz County homes receive typically offers within the first 3 weeks, unless there is an unusual characteristic not accounted for by the price.   On average, million dollar plus homes are taking longer to sell across Santa Cruz County: up to 7 weeks (compared to 4 weeks last quarter).      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, and skateboarding.    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 experiencing the spaciousness of just 440 people per square mile here, compared to more than 3 times the density: 1400 people per square mile in Santa Clara County!   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.  Hire a REALTOR® you can trust, who has enough time to dedicate to you!    Experienced Realtors can help you untangle the maze of decisions, preparations, negotiations, inspections, title and disclosures as you buy or sell your home.    I can also give you referrals to trusted agents if you’re relocating.   My goal is to make the entire process easier to understand, less stressful, and as cost effective as possible for you.

Minolta DSC
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.     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 1, 2018:  MLSListings.com single family residences only.

 

Santa Cruz County home prices and trends: Market Update 2nd quarter 2018

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

2nd Quarter – through June 2018

Q2 2018 prices 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.

INVENTORY

Q2 2018 inventory

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.

ECONOMY

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.

Summit Road at sunset Jan 15

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!  

Minolta DSC
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.     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.

 

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.

 

montage
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.

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