The California Association of Realtors is calling it the New Normal: the housing market in Santa Cruz is characterized by two factors: (1) a lack of supply due in part to Baby Boomers staying in their homes and the state’s tax structure discouraging transfer; and (2) demand slowing on the high-priced end while buyers of low to moderately priced homes, including Millennials ready for their first home, continue to stream into the market.
The sales numbers for October certainly support that assessment. Only 138 single family homes sold during the month as compared to 159 in October 2015. To some extent both those numbers reflect a seasonal drop in sales. The fourth quarter of the year typically sees fewer transactions. But the drop is significant, and the trend is confirmed by September statistics for the two years. In 2015, September sales of single family homes totaled 206. This year, September saw only 166 homes change hands.
Another indication of housing scarcity is the fact that prices continue to rise. The average price of a single family home sold in October was $901,329. Compare that to the average a year earlier of $787,562. That is a dramatic difference! The average price just a month earlier was $866,574.
What conclusions can we draw for our buyers and sellers?
For sellers: it is still a great time to put your house on the market. People are out there waiting for you to offer your home. And because interest rates remain low, buyers are anxious to find a house now. Economists expect interest rates to go up (albeit slowly) beginning next month, which may impact potential buyers. Call me for a free evaluation of your home and for help getting it ready to sell.
For buyers: get your financing in order before you go looking for a home because sellers want to see that you are ready to pay for their house before signing a contract. With house prices remaining high, obtaining a low interest rate on your mortgage is vital to the affordability of your new property. Interest rates will probably be heading up next month so the sooner you lock in financing, the better your position. Then, when you see a home you like, do not delay in making your offer. I have access to all the tools you need to evaluate what a potential home is worth and whether you can afford it. We work with a number of terrific local lenders and inspectors who can quickly make sure the home is right for you and that you can afford to buy it.