It’s beginning to look a lot like Christmas – and it may not be white, but at least it’s wet! I heard that the Sierras have seen the most snow this fall than any time in the past 30 years – so is it time to hit the slopes? Not for me – not yet, anyway. I would be remiss if I blew town before providing you with the latest news in this Santa Cruz Real Estate Update December 2016.
This is the real estate market that just refuses to die. I listen to a number of real estate podcasts and pundits and they’re saying the sky is falling, or about to fall. Most of them don’t actually have any data to back up what they’re saying, and often fall back on the tired myth that real estate runs in 7-10 year cycles so we must be due for a correction, yes?
Because around here, the market is – at least for the moment – in rude good health. The median price for single family homes in Santa Cruz county in November 2016 was $795,000 – and that’s up a hearty 13.6% from a year ago, when the median price was a measly $700,000.
We also sold more homes this year compared to last – 145 homes closed in November, that’s up 12.4% from a year ago when only 129 homes sold in November 2015. And homes sold quicker this year, too – in an average of just 41 days, compared to 54 days this time last year. Not only that, but this year, sellers received an average of 98.8% of full asking price vs. just 97.6% of full ask a year ago.
Some of you may be thinking that we sold more houses this year because there were more houses to choose from. Actually, only 109 homes were listed for sale in November this year – and last year 113 homes were listed. Indeed, inventory remains very tight! There are just 445 homes listed for sale on the MLS in Santa Cruz county; of those, 182 are pending sale, with just 263 available for purchase. The way I figure it, that boils down to 65 days of inventory – just about two months.
It’s numbers like these that make me wonder, why everyone is so obsessed with selling their homes in the spring? The market is piping hot, right this second. I remember too that last year in December there was no slow down in the market, either – it just kept burning right through clear to January and beyond. The fact is, home owners who put their homes up for market at this time of year are blessed with very little competition. There may be fewer buyers, but the ones who are out there are serious, diehard, committed buyers who need a house now. What better buyer do you want coming through your door?
And behind door number two? Of course, the future’s uncertain but some trends are clear. Mortgage rates are already up sharply since Donald Trump won the election – up nearly 0.7% in only a month. The U.S. Federal Reserve is expected to raise the Federal Funds rate another 0.25% at is next meeting, given the overall strength of the economy. Whatever you read into the tea leaves, it seems clear we are heading into a higher interest rate environment which may not bode well for a strong real estate market this spring.
If you’re thinking about buying or selling a home in the near future, call me first!