SANTA CRUZ REAL ESTATE YEAR IN REVIEW 2016
2016 in Santa Cruz Real Estate, the year that was . . . kind of crazy! We had another big jump in home prices in Santa Cruz in 2016 - the average sale price was $889,000 for the year for single family homes, which in as increase of 12% over the previous year.
Why the big jump in home prices in 2016 in Santa Cruz?
For most of the year we had super low interest rates, a growing economy and a tech industry over the hill that produces many high paying jobs in the Bay Area. Santa Cruz is the closest and best beach town to Silicon Valley and is attracting commuters as well and retirees from the Bay Area. In comparison to the home prices in Silicon Valley, Santa Cruz can actually seem like a deal.
For example I recently sold a home to a couple that works and lives in San Mateo. They only need to go into their offices there 1-2 times a week and decided to move to Santa Cruz where they can be in a beautiful area near the beach and actually get a home for under $800,000. In San Mateo in that price range they were mostly looking at small condos.
After the election in November, interest rates went up quite a bit, almost 3/4 of a point. This has actually motivated more buyers to get into the market before the rates go up again, which could likely happen in 2017. This holiday season was the busiest I have ever seen in my 12 year career. Homes were coming on the market and selling within a week, one home in Seabright even sold within a matter of hours when it came on the market the day after Christmas.
The traditional advice is to wait until Spring to list a home but with these market conditions, I would not wait. Since buyers have so little to choose from, homes are selling very quickly and at asking or above asking price many times.
With the uptick in mortgage rates, and the likelyhood that they could rise more, many buyers are deciding to get in to the market now. This recent article in the Santa Cruz Sentinel explains how the increase in rates affect your monthly payments and how much it adds to the price of a loan over time:
We still have historically low interest rates right now and if you buy a home this year you can lock them in.
Here is a summary of the 2016 Real Estate Market in Santa Cruz:
- Average home price: $889,000 - increase of 12% since 2015
- Average days on market: 41 days
- Number of homes on the market in December 2016 - 209 - Down from 298 in 2015
- Number of new listings in 2016 = 2,170 - Down from 2,486 in 2015 (To put in perspective how low this is, in 2008 there were 3,278 new listings on the market in Santa Cruz)
What is ahead for Santa Cruz Real estate in 2017?
If the trend of a low number of homes on the market continues, I expect to see home prices continue to rise, although not as much as 12% like 2016. The increase in interest rates will affect the degree of the rise in prices but with the Silicon Valley economy going strong there will likely be many buyers ready to purchase in the Santa Cruz area in 2016.
Looking for your dream home?
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Any questions? Call Jessica Wallace at 831.419.9345