Santa Cruz Real Estate Trends - July 2016
The last two years have been the strangest on record for the housing industry. We are tied directly to the big cities of San Francisco and San Jose where there are high paying jobs and high tech companies going public. That drives the prices of homes up. The trend in San Francisco and San Jose and the Silicon Valley is higher prices and low inventory. I have seen this trend rise steadily over the last 6 years about 2010 and I figure there are at least another 3 years of rising prices in the Bay Area. The median price for a basic home in these cities and town starts at $1,500,000. I know I have a son and daughter in law living and renting in SF they can not find a one bedroom home or condo for $1,500,000.
A little story is the other day at one of my open houses in Santa Cruz I heard that someone had a friend selling a condo in SF lower pacific Heights. I asked how much and it was a 2 bedroom for $1,000,000! That is a great price in SF and they told me it was livable but needed a lot of work. I got real excited and called my son and told him. He said sounds like a million dollar fixer upper...
Santa Cruz follow that market trend of increasing home prices. The median price in Santa Cruz has just hit $849,000 and that is for a 2-3 bedroom 1-2 bathroom 1-2 car garage on a 4000 - 5000 SF lot. We do have homes for less and a lot of these people with high paying jobs in SF and San Jose will choose to live here becasue the lifestyle is better. We have super clean air and you can walk on the beach or go boating, fishing surfing biking...
Low Mortgage Interest Rates- Low interest rates are the only continuing positive trend of the housing market. Low rates average now less than 5 percent for 30-year fixed-rate loans, the lowest since the 1960s. These interests rates will go up but only by a 1/8 or a 1/4 percent. Buyers should be pre-approved every month or two if they are actively looking for a home.
Real-estate analysts believe that if the housing market stalls, some areas will continue to grow modestly while other markets gradually go soft, rather than pop. That's because unlike stockholders, homeowners don't normally panic when trouble strikes, and a house is a tangible asset that provides a place to live.
Even so, there hasn’t been as long a period of falling home prices around the country since the Great Depression October 29, 1929 – 1939
While a housing bust is possible, far greater job losses, significantly higher interest rates and a more inflated market across the country would probably be required. Home-price gains remain fairly constant with incomes in many cities, including Cincinnati, St. Louis, Kansas City and Columbus.