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The Site for Santa Cruz Real Estate
Santa Cruz Real Estate Market Update: July 2005
This article was originally published in the Good Times Magazine, the June 30-July 6, 2005 issue.
It's no secret that property prices are sky-high in Santa Cruz County. Time and again I receive phone calls from people who want very much to get in on the market, but they see the prices that properties are going for, and they practically go into shock. According to the California Association of Realtors, only 17% of households in California can afford a median priced home – and that's assuming a 20% down payment! In Santa Cruz, the figure is somewhere around 8 to 9%.
As of this writing, there are currently 62 “active” single-family residential listings in the city of Santa Cruz on the MLS. That's great; we're doing much better than we were a couple short months ago in terms of inventory. But what is the median price of these homes? At the moment, it's $848,500. Yowza! In January, the median priced home in Santa Cruz was, according to the Santa Cruz Sentinel, approximately $715,000. Of course, this is just a spot check – the median price averaged over the month would likely be different (hopefully lower).
The least expensive of these homes is a reasonable $379,000 – for a 1 bedroom, 1 bathroom home with a spacious 500 square feet on an expansive 0.02 acres (871 square feet) parcel. The next most affordable property is considerably more roomy – 2 bedrooms, 1 bathroom, 1068 square feet on a 4350 square foot lot – for a modest $599,000.
What's the situation with condos these days? Also as of this writing, there are 19 in the city of Santa Cruz, with the median price just under $500,000– for a one bedroom, one bathroom unit spread over 880 square feet. Granted, it's in a great complex, and it is possible to get more condo for a bit less money in a less prime location.
So why is it if only 8 or 9% of households in Santa Cruz can afford to pay these prices that the demand is so strong and prices continue to rise? One factor, of course, is interest rates: they continue to remain low, despite the Federal Reserve having raised short term rates steadily during the past year. Adding fuel to the fire are the creative folks working at the nation's lenders, trotting out ever-more creative ways to keep monthly payments low even as loan amounts soar. And let's not forget that many buyers of Santa Cruz property don't live in Santa Cruz – folks from all over the country and around the world are in the market to buy their slice of paradise, further boosting demand – and prices.
Wondering how much your property is worth in a market like this? I invite you to visit my web site, http://SantaCruzHomePrices.com for a free, no-obligation, over-the-internet Home Price Evaluation today!