Woah! The Santa Cruz real estate market has completely gone off the rails. Prices are not just rising, not just surging – they are exploding, violently, upward. The median home price of single-family residences in Santa Cruz county in April 2013 came in at a whopping $645,000 – an increase of 35.8% year-over year, and a 10.54% increase over the previous month. These are home prices spikes that we haven’t seen since…have we ever seen price spikes of this magnitude?
Watch this month’s video with the market highlights and insights:
There is one bright spot in the picture though, at least if you’re a buyer, though: it’s not just the median price that is up significantly. Inventory is also rising, finally – and significantly. The amount of inventory available at the end up the month also spiked up to 364 units – that’s a 31.4% jump in a single month, however, that’s still 37.02% below the level from a year ago in April 2012.
Other interesting numbers from this month’s report is the sales volume – the sales volume is down. Just 142 homes closed escrow in April, down 9% from 156 the month before and down 10% from 158 a year ago.
In an environment like this, buyers are finding that it’s a bidding war out there, with almost every listing receiving multiple offers, often selling over asking price…often, far over asking price. That helps to explain the sales-to-list-price ratio, which stood at 100.6% in April for Santa Cruz county – which is to say that on average, sellers received 0.6% above the asking price for their homes.
Given what’s going on in the market, we’ve started a sort of betting pool on where Santa Cruz home prices are going. The prize is either a $25 gift card from Starbucks or Amazon.com. Think you know what the median home price is going to come in at next month? Visit this page to predict the May 2013 median home price in Santa Cruz.
While the growing inventory is encouraging for buyers, inventory is still very low, and it’s still very much a seller’s market. But does anyone think that prices can continue shooting up this steeply? Most observers would agree – these price increases are unsustainable. Who is earning 35.8% more this year than they were last? Surely these increases won’t last long, but for the moment, it’s a perfect storm for sellers – for many, it may be their chance to sell their home for more than it’s actually worth. If you’re contemplating selling your home to take advantage of this perhaps once-in-a-lifetime market – my advice is, don’t delay.
As always, to get the full, PDF version of my newsletter, broken down by different areas of the county and also by Single Family Residences as well as Condominiums, click here to download the full the Santa Cruz Real Estate Market Trends newsletter.
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