On one hand, the median price was significantly up, close to its all-time high
Picking up the thread…taking a closer look at the state of the real estate market in Santa Cruz as we head into the summer months people traditionally regard as the “prime” selling season.
Last week, we looked at 2019 sales data for the County through the end of May. (If you want to receive an expanded version and more detailed monthly stats in the future, just email me.) The results were decidedly mixed and seemed to portend a shift in the market over the coming months.
On one hand, the median price was significantly up, close to its all-time high. On the other hand, the rest of the metrics are trending in the opposite direction: sales are down, inventory is increasing, days on market are growing, the percentage of list price that properties sold for is slipping. These factors are all indicative of a slowing market.
Time to insert my usual note of caution here: Don’t worry folks, the sky isn’t falling. Slowing down isn’t the same as plunging into the abyss. That’s a little PTSD you are experiencing, left over from the shock of the Great Recession, which was a once-in-a lifetime event, not likely to repeat itself.
So what does it mean? Can prices actually go up if the market slows down? How can sellers, buyers and/or agents wrap their heads around the cognitive dissonance in the data?
Hint: Start by looking at the same monthly stats for Santa Clara County through the end of May. There are no mixed indicators there. The info presents a very one-sided picture. Here’s a quick snapshot:
Median Price? Down by a chunk, year-overyear, for the month of May. $1,340,000 in 2019 vs. $1,400,000 in 2018.
Closed Sales? Down. 1,007 in May 2019. 1,102 in May of 2018.
Inventory? Up significantly – 1,400 single family homes vs. closer to 1,000 in May of 2018.
Average Days on Market? Also up. 24 days on average vs. 14 days in 2018
Percentage of List Price Sold? Lower. 111% in May, 2018. 102% in 2019.
Months to Sell? Up. 2.0 months this year vs. 1.2mo in 2018.
Next Week: We’ll examine the relationship between Santa Cruz and Silicon Valley and how these two real estate markets interact and affect each other.