February is the month in Santa Cruz when the real estate market starts to warm up. The darkest days of winter are behind us, and the sun is getting a little warmer – or, this year, perhaps a little too warm this early in the season! But is the real estate market feeling the heat? Let’s look at the newest numbers in this, the Santa Cruz Real Estate Update February 2016.
The number everyone looks at first is of course the median home price, which rose to $703,944 in January, up 4.9% from a year ago, but down 1.3% from the prior month. The days (months, or even years!) of double-digit price increases appear to be behind us, for now – but the market remains very hot.
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Sure, the number of closed home sales last month dropped like a rock – down nearly 40% from the prior month in fact. But last December was an atypically strong month for real estate sales, and it’s one reason why I think the real estate market will do very well this year. But compared to last year at this time, the number of sold homes dropped only by 1% – in the range of a statistical anomaly. And homes are selling more quickly this year than last – the 96 homes which sold in January did so in an average of 52 days, about 22% faster than the corresponding time period a year ago. And on average, sellers received 98.3% of asking price for their homes – up a bit both from the prior month and the prior year.
Unsurprisingly, there has been a surge in inventory over the past month. The number of available single family homes in Santa Cruz county has increased 13% compared to a month ago – but I still calculate that as just 62.6 days of inventory – which is painfully low. The silver lining though is that there are presently 122 homes available under $1 million – and that’s up 20.8% compared to the month prior. More “affordable” housing is on the way it seems!
Is low inventory the new normal?
Our inventory has been running low for years now, and it’s been keeping upward pressure on prices. There are forces at work which are keeping the inventory of homes in Santa Cruz low. Learn how and why we’re in this situation, and if there’s any way to fix it in this in-depth article.
Verily, t’is the time of year when inventory starts to build. There’s going to be a lot more inventory coming on the market as we hit spring and then summer – you can expect inventory to peak around August or September. And this brings up the perennial question – when is the best time to list my home for sale?
Trouble is, there’s no way to know that for sure, except in hindsight. What seems brilliantly clear to me is that right NOW is a fine time! With only a bit more than a two month supply of available homes on the market, low interest rates, and a stable (if perhaps not quite thriving?) economy, how could things get much better for sellers? Put another way: do you think buyers will have more choices of what to buy in 2-4 months than they do today – or fewer? And do you think it’ll be easier to sell your home when buyers have more choice, or less?
Want the best price for YOUR Santa Cruz home?
Most sellers though cannot precisely time when they’ll put their home on the market – they’ll need to wait until a school year ends, a job transfer happens, a tenant moves out, etc. This year, I can say it probably won’t make much difference. While right now is an amazing time to sell your home, it’ll probably still be amazing in a few months. Probably. If you’re looking for a sure bet, be in the moment, be in the now. Now is the time to sell your home quickly, and for the highest price, with the least amount of hassle, risk, and uncertainty. 🙂
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Santa Cruz Real Estate 2016 By the Numbers
Median Price: $703,944 (up 4.9% Y-o-Y, down 1.3% M-o-M)
# Homes Sold: 96 (down 1% Y-o-Y, down 39.2% M-o-M)
Average Days On Market for Sold Homes: 52 (vs. 67 DOM year ago)
Sales to List Price Ratio: 98.3% (vs. 98% last month, 98% last year)
Single Family Homes Listed on MLS: 373 (up 12% M-o-M)
Pending Sales on MLS: 156 (up 36.8% M-o-M)
Available Homes on MLS: 217 (up 13% M-o-M)
Available Homes under $1 million: 122 (up 20.8% M-o-M)
Days of Inventory: 62.6