Santa Cruz Median Home Price: $475,000 in Sept. ’08

Seb FreySanta Cruz Real Estate

Still, though – if you have a house in Santa Cruz, you’re looking at it being worth about $58,725 less than it was this time last year, if your house is something like the median house. … I looked at Sold Single Family Residences: Median Price of Sold Houses in June & July of 1999 Watsonville: $247,000 (1.0) East side Santa Cruz: $390,500 (1.58097) West side Cruz: $395,000 3/2 1486 (1.59919) Capitola: $360,000 (1.457489) Soquel: $379,000 (1.5344) Felton: $310,000 (1.2551) What this says is that back in the summer of ’99, the median-priced house in Capitola cost about 1.457 more than the median-priced home in Watsonville. Now, let’s look at sales data from September 2008: Watsonville: $352,000 (1) East Side Santa Cruz: 615,500 (1.74857) West side Santa Cruz: 702,500 (2.0468) Capitola: $711,000 (2.01988) Soquel: $610,000 (1.73295) Felton: $486,500 (1.3821) (* August 2008) You’ll notice that compared to the 1999 ratio, the sampled areas in the county appear considerably higher relative to Watsonville than they have been historically. If we use the same ratio from the summer of ’99, here’s what prices in the rest of the county should look like today: Watsonville: $352,000 East Side Santa Cruz: $556,501 West side Santa Cruz: $562,914 Capitola: $513,004 Soquel: $540,108 Felton: $441,795 What does all this mean?

Billions, Trillions and a House in Santa Cruz

Seb FreySanta Cruz Real Estate

Flushing Money

I should have just sat there and watched as my hard-earned dollars evaporated, sucked it up, been a man, and lost all that cash, the price to pay for participating in our capitalist system. … So let me assure you – if you want to buy a house in Santa Cruz, and you have decent credit (at least a 580 FICO Score to qualify for an FHA loan, I believe) and you have the debt-to-income ratios required by the guidelines. … Mind you, the median price these days in the county is $585,000 (as of August), so it’s getting to the point where you can actually buy a habitable structure in a somewhat central location for that kind of bread. … That would leave you with a whopping loan of $482,500 and payments (all-in, including principal, interest, property tax, and insurance) of about $3,500 a month (roughly, approximately – and that’s before your considerable mortgage interest tax deduction ).

Santa Cruz August Median Home Price – $585,000

Seb FreySanta Cruz Real Estate

In the latest edition of my newsletter (if you don’t already get it, I invite you to subscribe to my Santa Cruz Market Trends newsletter ), I provide lots of juicy data about how real estate values are continuing to drop in Santa Cruz. hanging_on.jpg As of August 2008, the median home price in Santa Cruz county is now down to $585,000 – and in July of this year (just a month ago!)… In other words, it’s easier to sell your house this year than it was last year, so long as you are willing to sell it for 25.9% less than it would have sold for a year ago. … The median price for a condo in Santa Cruz county in August 2008 was $420,000 – that’s down 17.2% from a year ago, but up 3.4% from last month. … When you look at the MLS, it is very interesting to see where the “pending” listings (that is, houses that are in contract, pending sale) are in the spectrum – about 90% of them are below the median price of “active” listings.

Santa Cruz Housing Entry-Level Affordabilty – Up 67%

Seb FreySanta Cruz Real Estate

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.

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

Seb FreySanta Cruz Real Estate

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.

Is it safe to buy a house in Santa Cruz yet?

Seb FreySanta Cruz Real Estate

For example, our good, reliable, always-faithful friends at the California Association of Realtors (C.A.R.) report: C.A.R. reports sales decrease 28.5 percent, median home price falls 26.2 percent in February LOS ANGELES (March 24) – Home sales decreased 28.5 percent in February in California compared with the same period a year ago, while the median price of an existing home fell 26.2 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today. … Economy: Existing-Home Sales Rise, Prices Fall March 24 (Bloomberg) — Sales of existing homes in the U.S. unexpectedly rose in February as prices fell by the most in four decades. There are other data points we can look at – for example, check out this entry from the Countrywide Foreclosures Blog: 14,413 REO’s Offered For Sale on Countrywide Financial’s Website Total REO Asking Price: $2,976,805,967 (As of March 24, 2008) Sounds like a lot of REOs – but look at the chart – the inventory is going down. … They’ve got a bit of input on the New Home Sales numbers as reported by the Census: [From More on New Home Sales – Calculated Risk] There are actually two pieces of good news in the report.

There’s No Such Thing as Market Price

Seb FreySanta Cruz Real Estate

When people are looking to buy property and searching on the internet, I encourage them to search a bit, maybe a good bit, over the their budgeted price, because the list price is not necessarily what the home is going to sell for – often, homes sell for far less than list price. … I’m not saying that the house is actually worth 9% more than we’re paying for it – my feeling is it’s worth about 2-3% more than we’re paying for it, but it’s nifty to have a high appraised value, it makes for good talk when drinkin’ beers with your buddies, you can tell them what a steal you got on the place. … Well, if you listened to the Realtors ’round the market cooler and all their banter about the buyer setting the price and being the best indicator of market value, blah blah, then you’d be led to believe that’s all the house is worth. … That’s where you buy a property where, in its present condition, it is worth 40% less than it could be, if you poured tons of time, money, and/or sweat equity into the property.

Santa Cruz and Mega Region Real Estate

Seb FreySanta Cruz Real Estate

Though theoretically we should be able to work just as efficiently from, as he puts it, “a ski chalet in Aspen or a house in Provence as an office in Chicago,” the facts suggest that the rise of a handful of global megaregions — centers of both creative innovation and economic productivity — has made place more central to people’s lives than ever.

…It’s a funky little quasi-hippie beach town with a behemoth of a University that sucks up a lot of resources and clogs our rental market with students who abuse the property and cause no end of hassle for the neighbors what with their endless parties and pot smoking and Che Guevara posters clearly visible through the windows.

…There is no doubt that Santa Cruz is an extremity of this mega-region known as the San Francisco Bay Area/Silicon Valley – and I invite you to consider the possibility that this is not a bad thing.

…But if you are in it for the long term, I still believe (regardless of what my brother says) that it’s a smart thing to hold real estate in Santa Cruz.

It’s a Swing Thing

Seb FreySanta Cruz Real Estate

I stumbled upon a cool animated graphic, courtesy of CNN Money/Fortune, which I think many of you will find of interest:

…It’s interesting to see how most of the steep market declines we’ve seen over the past 50 years have been relatively short.

… Of course, the debate is still open as to if Real Estate is a better or worse investment than the stock market – how much of the price rise shown in the chart is due to inflation, etc.? I’ll leave that to you and your financial planner to discuss, but if the answer comes out that buying a house is an OK thing to do in a down market, with an upside looming around the corner, I’ll be here.

There’s a Moral Imperative to Buy Foreclosures

Seb FreySanta Cruz Real Estate

Every time a neighborhood experiences 2.8 foreclosures out of 100 owner-occupied properties in a single year, crime there and in the surrounding blocks jumps 6.7%, according to a 2006 census tract study by the Georgia Institute of Technology and the Chicago-based Woodstock Institute. A related study by the same researchers concluded that homeowners lose 0.9% of their property value if they are within one-eighth of a mile from a conventionally foreclosed-on, single-family residence.

…There is a 7 day free trial and you may find a deal that can be used to restore and repair a home that has been foreclosed upon and make some extra money at the same time.

…Sure, they probably get a kickback for referring people to – if you look at the actual blog entry, you see there’s a hyperlink to that goes through some pay-per-click mechanism and they make a few cents or whatever each time someone clicks on the link.