Gallery

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.

Gallery

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