Santa Cruz County Real Estate Market Report: August 2015
Brrr! Is It Getting Cold In Here?
Every year Santa Cruz County enjoys its “Locals’ Summer” in September and October. Tourist season winds down, kids have returned to school and our Indian Summer kicks up the heat as Autumn lingers around the corner.
Unlike the weather, the latest numbers show that Santa Cruz County’s housing market is cooling off. Home values are not far off from where they were a year ago and August’s median sales price for single family homes came in at $715,000 down from $750,000 in July. Condo/Townhomes have also seen a decrease in median sales price coming in at $552,500 from $458,000. New listings and properties sold are down from July as well, down 13% and 9.8% respectively.
This dip in home values might be a sign of the times. Many Santa Cruz County residents didn’t think it was happening, but it is and the proof is in the numbers. We are starting to go negative. Many industry experts have been expecting to see a monthly decline as markets return to “normal” and it is no surprise to see this occurring in August as the 2015 buying/selling season winds down slightly and summer comes to a close.
We see this seasonal shift in the market in inventory each year in what I have referred to as the Camelback Chart. Get it? The chart below looks like a camel’s back and shows how the number of new listings per month changes month to month over the course of the year.
It would appear that the market may be leveling off. This is somewhat good news, especially for home buyers, as it will ease some of the competitive pressure. I would venture to guess that this dip in price may inspire homeowners who have been sitting on the fence pondering whether to sell, to finally put their homes on the market. This could help alleviate a shortage of available homes for sale in Santa Cruz County that buyers have faced in recent years.
The slower rise in home values will likely come as a surprise to Santa Cruz County homeowners accustomed to strong growth in home values year over year since the market began its recovery. Still, the key to home values will continue to be the pace of job growth combined with interest rates, inventory and the national and international economies.
Decreased valuations and more homes hitting the market along with still historically low interest rates may inspire renters to buy, especially as rents continue to increase dramatically and rental inventory is practically non-existent.
While on the topic of interest rates, there is continued speculation and murmurings of if/when the Fed will increase the rates. Money will not remain this cheap forever and when the rates go up it will become more expensive to buy a home thus impacting prices.
So what is next for the Santa Cruz County real estate market? Where are we headed? We will have to see how the next months unfold, until then…
Lets Take A Look At The Numbers
