Santa Cruz Real Estate Great Debate

You really need to look at the year before to see how the market performed – and from the statistics, we can see the median home price, county-wide, is actually down 33.5% in April of 2009 compared to a year ago. … Honestly, I am mystified how people can take a few anecdotes, completely ignore the state of the economy and the housing market as a whole, and now herald, with strident authority, that we are now at the bottom of the market and THIS, TODAY is the time to buy, or you will miss out on the chance of a lifetime. … Well, that’s not true – short sales can also occur at those prices, and some people who have had their homes a long, long time may have enough equity in them to compete with all the REOs and short sales. … Personally, I think it’s going to put increased pressure on the bottom of the market, as many people who were looking at buying a lower-priced “starter” home may now be thinking of stretching to go for one of these “premium” foreclosures which I expect we’ll be seeing.

Santa Cruz home sales rising, prices falling

As has been the case for several months, there is a bit of good news – the sales volume (number of houses, condos, etc., which have sold) has increased for the seventh month in a row, year-over-year. ekg.jpg Unfortunately, sales were not up month-over-month; in December of 2008, there had been 112 sales of single-family residences in Santa Cruz county; in January ’09, that number had sunk back down to 79. … The important thing to look at, I feel, is the year-over-year gain or loss, and this year, sales were up a whopping 21.5% from January 2008. … If you watch TV or listen to the radio, you may have heard a commercial or two from the National or California Association of Realtors telling you this is a great time to buy , that there are a lot of homes for sale. … There are not many homes for sale at all – the amount of inventory is down 21.6% from January a year ago, and inventory has been declining for nine straight months.

Santa Cruz Housing Entry-Level Affordabilty – Up 67%

The C.A.R. report breaks it down county-by-county, and reports this as the Santa Cruz county: Q2 2007: 18 Q1 2008: 28 Q2 2008: 30 So since Q2 2007, Santa Cruz county has soared 12 points – that’s 67%! … C.A.R. also goes on to report that the median entry-level priced home is going for $531,250 – and that’s a steep drop from what homes used to be going for ($750K+). … In case you’re curious, C.A.R. also figures that a home costing $531,250 is going to cost a buyer $3,380 per month including principal, interest, tax, and insurance (PITI) – assuming a 10% down payment (check under your mattress for that $53,000 you have lying around). … And the good news is, these prices are still dropping in many areas – it’ll be interesting to see where Santa Cruz county sits in next quarter’s affordability index.

This is getting ridiculous

For example, we were doing an exercise on calculating the rate of return on an investment in a home purchase – you buy it for this, you sell it for that, and assuming a modest 3% yearly increase in value, at the end of 7 years, you have made yourself a mint. Except, of course, they left a lot of figures out – like the cost of sale, repair and maintenance costs, the money you spent paying your mortgage above what it would have cost to rent it that whole time, etc. Putting that aside, though, they came up with their “profit” figure, and said, “but wait, that’s an after-tax number, if you had figured that as pre-tax income, really you would be looking at $X!” To figure out $X, they took the gain and added 28% to it, because that’s the tax that you would have paid on it were it income.

California Median Price down 29% in March, down 20.9% in Santa Cruz

But check out this news from C.A.R., the California Association of Realtors: [From the California Association of Realtors – median home price fell 29 percent in March ] Home sales decreased 24.5 percent in March in California compared with the same period a year ago, while the median price of an existing home fell 29 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today. falling_man.jpg It’s a pretty interesting article, with lots of numbers to pick apart. … The C.A.R. data says otherwise – the only city it breaks out in Santa Cruz county is the City of Santa Cruz, where it reports that median home prices have dropped 17.9% since March 2007. … The bad news is that if you need or want to sell your house, C.A.R. has just provided ample proof (again) of what you might have maybe thought: now is not the time to sell your home. Also, you might want to make sure your home equity line is still available, because your lender may get wise to the fact that you probably have a lot less home equity than you thought you did.