KEY THOUGHTS ABOUT THE SANTA CRUZ COUNTY REAL ESTATE MARKET
- The statistics for year-over-year median single-family home prices decreased for August and prices are down about 5%. In contrast, condos and townhomes are up about 10% when compared to August of 2018.
- Inventory levels for single-family homes, condos, and townhomes decreased in the last month, but are still at levels slightly higher than they were at the same time the previous year. After Labor Day, there has been a slight inventory pickup and renewed buyer activity in the marketplace, as is customary in the Fall.
- With nearly 3.7 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.
- With the recent European Central Bank actions, the market is anticipating an additional 0.25% reduction in the federal funds rate soon, and possibly a further 0.25% reduction by the end of the year. Each of these reductions could have positive impacts on stocks as they come to fruition, but they also are indicative of a weakening economy.
- Interest rates have ticked up slightly over the last few weeks, but are still down from last year. With the 2 Year and 10 Year Treasury hovering at 1.7%, mortgage rates are around 2.875% for a 5/1 ARM and 3.625% for 30 Year fixed products.
- Everyone is on recession watch right now, and buyers are hoping to wait until the picture is clear, so attractive pricing is necessary to get buyers off the fence. In some cases, the attractive pricing can lead to multiple offers, but agents will be wary of sharing this with their clients.