And here we are, just past half-way through 2019! Happened so quick, I’ll bet you feel a bit of whiplash. It’s been an interesting half-year so far, especially when it comes to the Monterey and San Francisco Bay Area real estate market. For this 2019 Mid-Year Real Estate update, I took a dive through the MLS (Multiple Listing Service) to dig deep through the numbers for Santa Cruz, Santa Clara, and Monterey counties for the first six months of the year. So how is our real estate market doing, at the mid-point of 2019? One that comes through loud and clear is that just like politics, all real estate is local. The story told through these numbers is much different in all three counties. If you want, you can skip down to the county that interests you most: Santa Clara, Santa Cruz, or Monterey. Seb Frey Talks Real Estate Mid-2019 on Seb Frey TV Santa Clara County Santa Clara County is the heart of Silicon Valley – what happens there affects the real estate market for a large portion of northern California, and all of the San Francisco and Monterey Bay Areas. The numbers for the first half of 2019 are markedly different than the first half of 2018. In particular: Homes are taking almost twice as long to sell this year (93% longer) Price Per Square Foot has dropped 6.76% Average Sale Price has dropped 6.63% Median Home Price has dropped 8.95% Sale to List Price Ratio down 8% Home Sales are down 9.5% this … Read More
Watch the 2018 California Housing Forecast Video Also available in audio-only format on the Bay to Bay Podcast Last October, I was fortunate enough to attend the California Association of Realtors Conference and Expo in San Diego. One of the highlights of the multi-day event was the presentation given by Leslie Appleton-Young, the Chief Economist for the California Association of Realtors (C.A.R.). The presentation was a 2018 California Housing Forecast, and included very detailed charts and statistics. I recorded the audio of the presentation on my iPhone and received the PowerPoint slides later from Leslie herself. With the audio and the slides, I was able to create the video you see here on this page. It should be noted that the much of the presentation details what had already happened in California in 2017. After all, much of what will happen in 2018 will be dictated by what happened in the past. And some of the presentation is intended for the audience seated in the hall that day, that is to say, members of the California Association of REALTORS. But most of the information will be of considerable interest to anyone who is concerned with housing in California. Given the incredibly high cost of housing here, I figure you’ll be interested in a lot of this information whether you rent or own. Key Points from the 2018 California Housing Forecast US economic and job growth expanding Job growth continuing, but slowing, in California Mortgage interest rates rising to 4.3% average for year U.S. GDP to grow … Read More
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.
Fact is, we have been seeing multiple offers for well over a year now on these bargain-basement properties in Watsonville – and pretty much anywhere in California where bank-owned foreclosures are sold several percent cheaper than competing properties – these properties attract multiple offers and sell quickly. … Pretty much – I didn’t go into 87 Arista when it was on the market, but from what I can tell on the MLS from the pictures, the choice of paint colors and level of amenities in this home was about on par with my listing. … And then, a scant two months later, my own listing comes on with an asking price of $250,000 – that’s 3.8% less than the sale price of a very very comparable property which closed just two months earlier…and I’m on the market eight days, and I’m standing in a field of chirping crickets . … But not too far below – if in fact you were able to buy a home for 10% below true market value, you could not do a thing to the property, then turn around and sell that property to someone else the next day for 10% more than you paid for it.
One biggie is that I am completely and utterly swamped with work, and while my blog is actually very important to me, it falls into the “important but not urgent” quadrant of McCovey’s “first things first.” Another reason I haven’t written anything is that I don’t know quite what to say! Every day, I read the newspapers and the blogs and e-zines and and I watch TV and listen to podcasts, absorbing all the real estate news that there is, and I try to make sense of it all, I try to wrap my head around it and come to some kind of conclusion that I feel certain enough about to write up a blog entry, sharing my thoughts with you all… … The optimists in the crowd will also point to months of falling inventory – this time last year, there were 989 single-family residences for sale in the county, and now we’re down to 803. … I think an important thing to consider in all of this is that the inventory is not shrinking so much because of the high sales volume, but rather it is shrinking also because many sellers are letting their listings expire, or just outright canceling them, taking their homes off the market.
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. 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.
The Housing Crash guy says: A landlords’ rule of thumb is that a house price should be a maximum of 15 times the annual rent for that place, yet in coastal areas, houses are still selling for 30 times annual rent I think he’s got a good point there – which goes to underscore my belief that prices in Watsonville are actually very reasonable at the moment. … Looking over the ads on Craig’s List, it’s safe to say that a 3 bedroom, 2 bathroom house would rent for about $2,400 a month in Santa Cruz, assuming it was in a not-so-great location. … Let’s look at the payment for a $500,000 house – but let’s assume you’re putting down a reasonable 10% instead of the FHA minimum of 3.5% – so you’d have a $450,000 loan, again at about 5.75% because with only 10% down, you’d still need to pay mortgage insurance. … Let’s say you’re in a tax bracket of 25%, and you can figure you’d save about $640/month in federal and state taxes, bringing your effective monthly after-tax payment to about $2,519 per month, or just about $120 more than renting.
In December 2008, the median price crashed down to $452,500 – that is a year-over-year drop of a bit more than 38%. When you look at the entire year (2008 vs. 2007), you see that the median price drop was only 22% – however the fact that it was down 38% in December indicates that prices sank much faster in December than the year as a whole. … However, in December particularly, sales surged compared to the figure from a year ago, up 47.4% – that is, 76 units were sold in December ’07 and a whopping 112 in December ’08. And remember, my web site has a page just for Santa Cruz Real Estate Market Data – you can check it out any time.
Happy New Year! I hope everyone had a safe and sane New Year’s Eve, and I hope that as I type this on January 2nd, most of you are taking the day off to spend on vacation, or with friends and family. We’ll all get back to the grindstone soon enough, but I think that after all the chaos and tumult of 2008, everyone deserves a four-day weekend to start off the new year. Can you feel it? I’m feelin’ it. I am, of course, referring to the angst surrounding the real estate market. There are a lot of people out there who would like to buy a home in Santa Cruz in 2009. There’s also a lot of people who would like to sell a home in Santa Cruz this year, too, but feel they cannot or should not because they now owe more than their homes are worth. Thanks to the likes of Google, many of you can easily find the predictions for the 2009 real estate market. I’ll give you a summary of what they’re saying: prices are expected to continue dropping through much of 2009 (probably all of it, if you ask me) but not by much. Interest rates should remain low at least for the first half of the year. We may start to see a rebound in prices in 2010, but it will be moderate. The much-loved California Association of Realtors has put out a report titled State of the California Housing Market 2008-2009. Unfortunately, they want you to pay … Read More
OK, this data is about a week old, but I bet you haven’t seen too much of it, so here it goes. For starters, we have some good news. … The bad news, though, is that the median price in October 2007 was $732,500 – so, year-over-year, prices have dropped 31.7% in Santa Cruz county. … Also, some good news for sellers out there is that the amount of inventory (i.e., the competition) is getting low – we are down to just 195 days worth of homes for sale – versus 215 days of inventory in September, and a whopping 361 days of inventory in October 2007. … If you are a home seller, and you can wait 2-3 years to sell, you might want to wait, because it’s possible we’ll be in a better market by then – however, if you plan to sell in the coming year, I’d urge you to accelerate your plans, because I’m pretty sure prices in most of the county will be lower towards the end of 2009 than towards the beginning.