KEY THOUGHTS ABOUT THE SANTA CRUZ COUNTY REAL ESTATE MARKET
- The statistics for year-over-year median single-family home prices decreased for September and prices are down about 14.5%. In contrast, condos and townhomes are up about 2% when compared to September of 2018.
- Inventory levels for single-family homes, condos, and townhomes are similar to September of last year and the number of sales was greater.
- With nearly 3.6 months of SFH inventory and 2.8 months of condo/townhome inventory, the market is somewhat balanced, but it is still a slight seller’s market.
- Interest rates at the end of September and into October are nearly .25% from the all-time lows achieved in 2012. This combined with price reductions in the market has increased overall affordability and has likely been the reason for the increased sales.
- The Federal Reserve had been in a tightening mode from September of 2018 until July of 2019. Since then the Fed has launched an easing campaign that has dropped interest rates for mortgages and should increase the supply of money in the system. This is usually bullish for mortgage rates and housing in general.
- Many of the Silicon Valley buyers have gone back to the Silicon Valley to purchase because there has been a 15% pullback in pricing in some markets. This has an impact on Santa Cruz County but could also be the window many local buyers need to get into a home. Sellers should expect longer market times and lower prices overall as we move to the end of the year, but if these prices hold, inventory could shrink into 2020 and create a more robust sellers market at the start of the year beginning from lower price points.