Median Home Price Drops to $702,500

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Wow, did you feel that? The big thud, as home prices just dropped through the floor? It was front page news in today’s Santa Cruz Sentinel:

Santa Cruz County median home price drops 8.8 percent to $702,500

Yep, housing prices are down 8.8% apparently. Take a look at the article, then come back and read the rest of this blog entry here.

As the article states, there isn’t really one housing market. There are many many housing markets, so it is very hard to generalize. Actually, it’s easy to generalize, but it’s harder for a generalization to mean much when you’re talking about the Santa Cruz housing market. We just had this discussion in our office meeting today, actually: what to say when someone asks, “How’s the market doing?” The correct answer is: “Which market?” As the article points out, many segments of the market are doing just fine, and other segments are doing very poorly.

The headline in the paper was all about home prices, but when you read a little further down, you see that the article also goes into sales volume – how many homes were sold in September. Last month, just 88 single-family residences were sold in all of Santa Cruz County – that’s an 11-year low. What’s that mean? Well, it means many things. It means that only 5% of Realtors sold a single-family residence in September. It also means that if you want to sell our home in this market, you need to price your home aggressively.

Of course, if you’re one of the few buyers out there, it means that in many market segments, you are in the driver’s seat. It is, however, very important to know the state of the market you’re trying to buy into. If you are buying in Watsonville, you can really take advantage of the weak position that sellers are in down there. But if you’re buying on the west side of Santa Cruz, or down by the beach just about anywhere…forget about picking up a bargain. There’s good demand in those areas, and any seller who has priced their property according to recent comparable sales will probably get very close to their asking price.

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