Well the summer’s been hot but now here in the middle of August, I see that the shops are having back-to-school sales galore, and unless my eyes deceived me, I’m pretty sure that I saw Halloween decorations when I was down in Costco the other day! Which can mean only one thing: summer is slipping away and fall will be here before you know it. Where does the time go?
Wherever the time goes, the question is, where’s the market headed as we go into fall? Take a look at the latest graph showing the Santa Cruz median home price, year to date in 2013:
The “good” news is that the median price did actually rise 1.9% last month as compared to the month before, and it is still up 5.4% over the year-ago period, July 2012. But as you can see, the market appears to have peaked in April, when the median price was up a whopping 33% compared to a year ago. The gap in prices over last year is narrowing – might we end the year with prices lower than they were a year ago?
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There is, of course, no way to know. Home prices don’t necessarily decline as we go into fall – in fact, here locally, October, November, and December can enjoy some of the highest prices in the year. It really comes down to our old friend “Supply Vs. Demand.”
As you can (kind of) see from the chart above, when there is less supply as a ratio to demand, prices rise. Prices have JUMPED since the demand has been high and inventory has been low. Inventory has been rising, but it’s still 16% below the level it was a year ago…and last year, there wasn’t a whole lot of inventory, either. But if inventory rises and demand falters – what will happen to the market then? It’ll be time for buyers to get our their forks and knives, and for sellers to get taken down a notch.
As always, to get the full, PDF version of my newsletter, broken down by different areas of the county and also by Single Family Residences as well as Condominiums, click here to download the full the Santa Cruz Real Estate Market Trends newsletter.
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