A few days ago, after about a month’s silence, I wrote something of a “doom and gloom” blog entry about Santa Cruz real estate – in fact, I’m proud to say, the entry was even picked up on the HousingDoom.com blog, which I read now and again to stay in touch with my darker side. […]
I love it for many reasons – I won’t count all the ways I love it, suffice it to say that it’s a great public service as well as a prime way to drive traffic to one’s real-estate related web site. … There’s a rental scam going around on Craig’s List, where someone tries to rent out a house they do not own, one which they saw for sale on Craig’s List. … I have a sweet property listed for sale on Monterey Avenue in Soquel , and a couple of people contact me yesterday about this scam – they had been given the property address by the scammer, and they went and drove by the property, whereupon they saw my “for sale” sign and contacted me, asking if it was for rent or not. … The scammer asks the victims to proceed to a Western Union and send in the deposit money, and upon receipt of which he will make arrangements for you to get the keys.
The Housing Crash guy says: A landlords’ rule of thumb is that a house price should be a maximum of 15 times the annual rent for that place, yet in coastal areas, houses are still selling for 30 times annual rent I think he’s got a good point there – which goes to underscore my belief that prices in Watsonville are actually very reasonable at the moment. … Looking over the ads on Craig’s List, it’s safe to say that a 3 bedroom, 2 bathroom house would rent for about $2,400 a month in Santa Cruz, assuming it was in a not-so-great location. … Let’s look at the payment for a $500,000 house – but let’s assume you’re putting down a reasonable 10% instead of the FHA minimum of 3.5% – so you’d have a $450,000 loan, again at about 5.75% because with only 10% down, you’d still need to pay mortgage insurance. … Let’s say you’re in a tax bracket of 25%, and you can figure you’d save about $640/month in federal and state taxes, bringing your effective monthly after-tax payment to about $2,519 per month, or just about $120 more than renting.
A month ago, I wrote a blog entry about a homeowner in Soquel who was having a blue light special on the sale of his home. I guess it didn’t work out so well – his Soquel home is now back on the market – for $829,000, or about $79,000 more than it was on for sale about a month ago. … Of course, this home is in Soquel, which is considerably more expensive, but the median there is only $610,000 (although the average is $843,000). This time around, rather than trying to catch the buyer’s eye with a lowered price, the seller is trying to catch the Realtor’s eye – with a juicy 4% commission to the buyer’s real estate agent. … A strong incentive, to be sure – but of course, we Realtors are duty bound to hold our clients’ interests above our own, and persuading your client to over-pay on a real estate purchase in exchange for a healthy commission seems like a breach of fiduciary responsibility to me.
That’s good news, but if you think about it, you’d realize it couldn’t actually get much worse, and even with this improvement, we’re really just kind of skipping along the bottom. If you don’t already, I invite you to subscribe to my Santa Cruz real estate newsletter , which comes out once a month, or just cruise over to my page of Santa Cruz Real Estate Market Data , which is updated monthly.
…And, of course, I don’t have the hard data handy to back this up, but I’m going to go out on a limb and say that I’d bet most Februarys have at least 9.1% more sales than the Januarys that precede them.
… That 9.1% is the sales volume – that is, the number of units (single-family residences – yes, your home is just a unit, like a Big Mac or a jar of Ponds Cold Cream ) sold was 9.1% higher in February than in January.