Santa Cruz County 2020 Real Estate Wrap-Up

sebfreyCharts and Statistics, Local, Santa Cruz Real Estate

There’s no question that 2020 was unlike any year in living memory, and 2021 certainly got off to a rocky start. I’m optimistic that much of the turbulence is behind us, and that we’ll be looking forward to a year of regrowth and relative normalcy. However, this Santa Cruz County 2020 Real Estate Wrap-Up will be looking back on the year as a whole. To begin, let’s compare the Santa Cruz 2020 real estate market compared to the three years which preceded it: Santa Cruz County: 2020 vs. 2019, 2018, and 2017 Next, check out this graph showing home price appreciation in Santa Cruz County since 1990. As you can see, the median price in Santa Cruz County was considerably higher than any year in the past 30. Santa Cruz County Home Price Appreciation since 1990 Next, take a look at yearly home price increases in Santa Cruz County since 1994. Prices were up 10% in Santa Cruz county in 2020 compared to the year before – where prices were flat year over year. It’s worth nothing that while 10% is a healthy increase, it’s by no means record setting or even much higher than average. Yearly Santa Cruz County home price appreciation since 1994 One startling aspect of 2020 was the ease sellers experienced getting their homes actually sold, irrespective of price. This next chart shows the huge jump in the percentage of listed homes going under contract, broken down by month. You cans that the early pandemic months showed a drop but December showed … Read More

California Proposition 19 FAQ

sebfreyHousing, Santa Cruz Real Estate, Sellers, Silicon Valley Real Estate

Californians voted in November 2020 to make some significant changes to Proposition 13, which was passed in 1978 to greatly limit the amount of property tax that the state could collect. 40+ years later, some of the problems with Proposition 13 had become clear, and Proposition 19 was designed to correct some of these. There are a great many questions that people have regarding what Prop 19 means for Californians, so the California Association of REALTORS prepared a California Proposition 19 FAQ which can be downloaded here. Proposition 19 is a modified (watered-down) version of Proposition 5, which had gone down to defeat in a statewide vote two years prior. These propositions were crafted and promoted in large by the California Association of REALTORS, which recognized that one reason the turnover of homes has slowed down was due to homeowners being “stuck” with a low property tax basis. Thanks to Prop 13, many California property owners enjoyed very low property tax. One unintended consequence of this was that long-time California property owners would choose to stay in homes which no longer met their wants or needs, but were inexpensive to own thanks in large part to the low property tax basis they enjoyed. This tamped down inventory, further exacerbating California’s real estate supply shortgage. Propositions 60 and 90 did allow some transfers of property tax basis. Prop 60 allowed for intra-county transfers, and Prop 90 allowed for transfers to and from a limited and specific set of counties. Proposition 19 allows many California property owners to … Read More

November 2020 Santa Cruz County Real Estate Report

sebfreyCharts and Statistics, Santa Cruz Real Estate

November 2020 Report with a Focus on North Santa Cruz County Cities  The November 2020 Santa Cruz County Real Estate Report will show that the Santa Cruz County real estate market is perhaps the strongest anyone can ever recall seeing. This article provides a number of charts and graphs that show in stark relief the state of the market. The long-term median sales price chart below is similar to those for counties around the Bay Area – a significant spike in median house prices since the pandemic struck in early spring.  As I’ve said elsewhere, recent jumps in median prices have been driven not only by appreciation in fair market values, but by increases in expensive home sales. Yes, the median price is up significantly, but the square footage of homes and the lot size are up markedly from years past. Affluent buyers have made up a significantly larger percentage of Santa Cruz home purchases since the pandemic hit.  The chart above illustrates market response and rebound from the 2 major disasters of the year.  The market typically starts a big slowdown in mid-November, running through the mid-winter holidays, until it springs back to life in about the middle of January. This year, the pandemic upended seasonality: Spring, usually the strongest selling season, saw a crash in activity. A dramatic recovery ensued, interrupted by the CZU fire, before bouncing back again. On a year-over-year, month-by-month basis, sales activity in May-October 2020 was above each of the corresponding months of 2019 – even this past August (by a … Read More

Santa Cruz County September 2020 Market Report

sebfreyCharts and Statistics, Santa Cruz Real Estate

In the context of the horrible fires we’ve seen in recent weeks – with so many of our communities and neighbors so terribly affected – a real estate report seems trivial. But since I have clients still trying to make buying and selling decisions, I’ll continue to deliver straightforward data on market conditions.  Surprisingly, the fires did not significantly impact the number of deals being made in most Bay Area counties during the last 2 weeks of August – the exceptions being those worst affected by the crisis: Santa Cruz (-33%), Sonoma (-22%), Monterey (-16) and Napa (-13%). However, activity began to pick up again in Santa Cruz County in the first week of September – though still about 20% below the pre-fire level. (This week by week chart runs through the end of August.)   Year-to-date house sales volumes and median sales prices by city:  Short-term and long-term median house sales price trends are illustrated in the following two charts.  Average house dollar per square foot values:  A snapshot measure of how many listings were typically active on any given day of the specified month: Inventory levels have been running very low, a big factor in market dynamics.   Active house listings and median house asking prices by city, as of 9/7/20: These numbers will change daily with ongoing market activity.  The percentage of active listings going into contract by month: A clear indicator of how high buyer demand has been this summer.  The number of price reductions has been very low, another indicator of a very … Read More

Santa Cruz August 2020 Real Estate Update

sebfreyCharts and Statistics, Santa Cruz Real Estate

Median House Sales Price – Short-Term & Long-Term Trends Bay Area Markets Comparison This table ranks each county by the percentage of active listings going into contract in June/July 2020, a standard statistic of market heat, compares it to the same period of last year, and then rates the scale of the year-over-year change.  Many counties are seeing dramatically increased demand over last year, with Santa Cruz seeing one of the biggest jumps.  Supply & Demand Active listings, new listings, listings going into contract, closed sales volume Lower inventory levels + increased buyer demand Higher-Price Home Sales – Year-over-Year Comparisons Selected Market Indicators Price reductions, average days on market, months supply of inventory, sales price to list price percentage

The Dangers of Overpricing your Home

sebfreyCharts and Statistics, North Monterey County Real Estate, Santa Cruz Real Estate, Silicon Valley Real Estate

The Truth about Overpricing your Bay Area home Click here to skip down to the charts and graphs for Santa Clara, Santa Cruz, and Monterey counties. Fair market value is that price a qualified, reasonably knowledgeable buyer is willing to pay, which a seller, not under duress, is willing to accept after the home has been properly exposed to the market. Many sellers, however, set a price higher than the market will bear – to their significant detriment. This article explores the dangers of overpricing your bay area home, with lots of facts, figures, charts, and statistics. Ironically, instead of getting more money… Over-pricing usually stigmatizes a property and reduces the eventual sale price to less than it would have been with more realistic pricing.”House Selling for Dummies Neither agents nor sellers determine market value: Only the market – willing and able buyers — determines market value. Agent and seller work together to create a plan which includes pricing, preparation and marketing — to maximize the conditions that reliably achieve the highest possible sales price. The vast majority of buyers will not make offers on homes they consider significantly overpriced. Either they don’t want to waste their time, or are uncomfortable with possibly “offending” the seller. In any case, they simply move on to other listings. Well-priced homes create a sense of urgency in the buyer/broker communities to act quickly with strong, clean offers, and often lead to competitive bidding between buyers – which is the most likely way to increase sales price. Overpricing wastes the … Read More

July 2020 Santa Cruz County Real Estate Market Update

sebfreyLocal, Santa Cruz Real Estate, Uncategorized

Market Activity Soars after Early Spring Decline Recovering from the initial shelter-in-place drop in sales activity, Santa Cruz County has now jumped well above the highest points of the past 2 years. The first 2 charts below illustrate the big rebound in listings accepting offers in both the general residential market and the higher-price home segment.  The Bay Area markets with the largest year-over-year increases in the number of listings accepting offers in June 2020 were the 4 outer Bay Area counties of Monterey (up 61%), Santa Cruz (58%), Sonoma (47%) and Napa (37%). They also have among the lowest population densities in the Bay Area. The more urban counties saw more modest y-o-y increases: San Francisco (6%) and Alameda (7%).  The year began with a relatively low inventory of homes for sale, and though that number has been increasing, it is still well down year over year.  The next 4 charts look at median home sales prices from a variety of angles. Remember that median sales prices are not perfect indicators of changes in fair market value: They can fluctuate due to a number of other factors as well.  Average days on market were quite low in the last quarter, a common dynamic in Bay Area markets. The homes that sold went into contract relatively quickly.  In Q2 2020, the average sales price was 2.5% below asking price.  And interest rates hit another all-time low in early July, adding fuel to buyer demand. 

How to Effectively Leverage Technology When Selling Real Estate

sebfreyMarketing, North Monterey County Real Estate, Santa Cruz Real Estate, Silicon Valley Real Estate

The real estate industry has always been a very human one. Successful REALTORS must gain an understanding of people to make their real estate dreams come true. It’s the sort of business that perhaps doesn’t appear to lend itself to technology – the combination of a firm handshake, an understanding ear and honest, bespoke advice is difficult to create out of zeroes and ones. But while the real estate industry isn’t one that is a slave to technology, it can certainly be enhanced by it. Modern tech can make the process of matching property with a buyer and make it even more human than it already is, by providing insights and avenues that improve the quality of the realtor/buyer connection. How can you leverage technology when selling real estate? Let’s take a look at four of the most effective ways. 1. Be everywhere on social media Social media is proving to be an incredibly valuable tool for REALTORS. A visual medium designed to facilitate connections, the likes of Facebook, LinkedIn, and Instagram are right in the sweet spot of real estate professionals. The value of social media will entirely depend on how well you use it. There are several mistakes that many realtors make, and some opportunities that tend to be missed. To maximize the effectiveness of social media: Know your niche and talk specifically to that audience. Give them a reason to follow you by offering value – post tips and tricks, share helpful articles, and give them a reason to laugh every once in a … Read More

How Multiple Offers Affect Sale Price

sebfreyBlog, Charts and Statistics, Commentary, North Monterey County Real Estate, Santa Cruz Real Estate, Sellers, Silicon Valley Real Estate

It’s that time of year again! Early in the year, inventory is low – but there’s no shortage of eager buyers looking to purchase a home. While an imbalance of supply versus demand is not uncommon in the greater San Francisco Bay Area, it’s especially acute early in 2020. New inventory is trickling onto the market, and it will continue to ramp up as we get into spring. But at the moment, there’s nowhere near enough new inventory to meet demand. Sellers with well-priced homes across the region are being rewarded with multiple offers from prospective purchasers. That is of course a wonderful situation for a seller – but it’s more like a nightmare for buyers. Many of these buyers will have been looking for months, even years, before they finally put an offer in on a property…only to find out that the seller has a number of competing offers to choose from. A buyer never knows how a seller will respond in a multiple offer situation. Will they accept just one offer from the “best” buyer? Will they make counter offers to specific buyers? Will they ask all buyers to respond with their “highest and best” offer, knowing that there are multiple offers on the table? What’s more, a seller can make different counter offers to different buyers, with different prices and terms. I’m helping clients manage a few multiple-offer situations at the moment, as listing agent and as buyer’s agent. Working with buyers in a multiple offer situation is especially fraught, because of course, … Read More

California Real Estate Forecast for 2020

sebfreyBlog, Local, Santa Cruz Real Estate, Silicon Valley Real Estate, Video

As you may have heard, I recently became a Broker Associate with Compass in Los Gatos (the former Alain Pinel REALTORS). There are a lot of benefits to working with a large, upscale brokerage – one of them being that you can get access to valuable information before the competition. Yesterday, our office had the first meeting of the year and it featured a feature presentation by Jordan Levine, the Deputy Chief Economist for the California Association of REALTORS. I have also seen many presentations by Jordan’s boss, Leslie Appleton-Young, and I even had her as a guest on an episode of the Bay to Bay Podcast. Jordan, by the way, is also a podcaster as he is the co-host of California Association of REALTORS Housing Matters podcast. Video of California Real Estate Forecast for 2020 The presentation was about 40 minutes long, as there was a lot to digest in there. The bottom line is that the 2020 real estate market is expected to look a lot like the 2019 real estate market: tight inventory, low interest rates, poor affordability, but with slightly more sales at somewhat higher prices (statewide, but the greater Bay Area should be an exception). Key Points for California’s 2020 Real Estate Forecast Housing prices may be up, but actual mortgage payments are down Lowest Unemployment in 50 Years Prices at the very high end softening, lower priced homes rising in price. Higher-end homes taking longer to sell U.S. 2020 GDP Projected @ 1.6% (down from 2.2% in 2019) U.S. Inflation … Read More