Median Home Price Falls 0.5% for the Year, Sales Down 15%

Continuing the trend begun in 2005, home sales in Santa Cruz County for 2006 were down year-over-year from January through October. The end of the year saw some strength return to the market with home sales up in November and December. Home sales rose because sellers started getting realistic about their pricing. The median price for the year was down only 0.5%, but, the year’s low was in December at $710,000. This is the lowest monthly closing price since December 2004. What does this bode for the future? I think we’ll see a strengthening market in 2007. Does that mean prices will go through the roof? No. It means we’ll see buyers and sellers coming to agreements and sales picking up with prices remaining steady.

Home Sales Continue to Rise in December

After twenty straight months of year-over-year sales declines, we’ve had two straight months of increased sales. Home sales in Santa Cruz rose 8.7% in December compared to December 2005. Home sales were up 8.9% in December. Prices, on the other hand, continued to fall for single-family homes with the median price down 1.3% from the month before, off 4.3% year-over-year. The average price rose 2.9%, down 2% compared to last December. The good news in all of this? Buyers and sellers are making deals! Inventory fell 20.2% and is now at its lowest level since January 2006.

The sales price to list price ratio rose 0.5 of a point to 97%.Days on market rose five days to 100. That’s the highest it has been since February 2002. A decrease in inventory pushed our days of inventory indicator down 28 days to 147. For buyers, the market looks to be tightening up. Inventory is now at its lowest level since last January. Prices took a tumble in December, but we expect them to firm up as the spring selling season begins. If you are looking to buy, this may not be a bad time to do it, especially with mortgage rates at their low for the year. For sellers, if you really want to sell your home, you need to entice offers and then negotiate them. Remember, in a market like this, your first offer is very often going to be your best offer. Work it. The real estate market is very hard to generalize. It is a market made up of many micro markets. For complete information on a particular neighborhood or for an evaluation of your home’s worth, call me.

The Santa Cruz Real Estate market for single family homes picked up substantially in November & December of 2006, ending the year on an up note.  The Santa Cruz Association of Realtors statistics show that the number of listings were down to 795 in December from a high of 1356 in July 2006. That means there are fewer homes for buyers to choose from. The year end average price of a single family home was $830,273 according to the Santa Cruz Association year end statistics. Compared to the year end average price for 2005 which was $835,034, that is a drop in appreciation of only -.6%. Not bad for all the bubble burst  news we listened to all year. In my opinion it is a great time for Buyers to buy. The homes that remain on the market seem to be priced competitively.The sellers who have reduced the price of their homes to a realistic price are seeing them sell after sitting on the market for months. Already 2007 has all the markings of a better year than 2006. Call me anytime if you would like to chat about any aspect of the market.