Median Santa Cruz home price drops to $599,000

Finally, the real state of the Santa Cruz county housing market is starting to show up in median home prices:

[From Santa Cruz Sentinel – Median home price drops to $599,000]

By JONDI GUMZ The median price for a single-family home in Santa Cruz County dropped to $599,000 in January, down 18 percent since December and a level not seen since 2004. … Only 63 sales closed escrow, a new low, the previous was 107 in 2006. A third of the January 2008 sales were for homes less than $500,000, more than double from previous months, and the subset of sales over $1 million, which had been as high as 25 percent, was 14 percent, the lowest in months.

For too long, the median home price has defied the reality out there on the streets, giving many buyers and especially sellers a false sense of what’s happening. Sometimes, we would see the median price inch up month over month, but for a long time it held steady at over $700,000.

But now, there’s been a significant drop in the median price, down to $599,000. Of course, it is worth noting that this is the figure for the county as a whole, and that some areas continue to hold up their values very well. That would be the usual suspects – Santa Cruz, Capitola, and pretty much anything near the beach.

And don’t go blaming Watsonville on being a drag on prices – hardly anything is selling down in Watsonville, although it had a much better month in January than it did in December, which was pretty much a train-wreck for sales. No, these lower-prices are county-wide, and even in Santa Cruz and Capitola, there are more bargains to be had than in recent years past.

The article is a good read, and it mentions that inventory is relatively low in many parts of the county, that many people who might want to sell are keeping their homes off the market, because now is not a good time to sell. That’s true, but what’s left unsaid is, what would happen if these same people found themselves in a situation where they had to sell?

Might we start seeing rising foreclosures in the rest of the county? Up until now, Watsonville (and to a lesser extent, Boulder Creek and the rest of the San Lorenzo Valley) has grabbed the lion’s share of the foreclosure activity. That’s because people tried to sell their houses, and found there were few buyers for them at the prices they were asking…and when you can’t make your house payment, and nobody wants to buy your house…you know the rest of the story.

Is this what lies in store for more of Santa Cruz county? I sure hope not, because what’s going on in Watsonville is pretty heartbreaking.

Everyone wants to know…

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