Read ’em and Weep
If you’re one of those buyers who’s been hoping against hope that prices would soften and the market would get easier to navigate in 2022, closed sales for the first two months have sent a definitive message for the time being: Don’t hold your breath. It’s not going to happen anytime soon.”
January sales in Santa Cruz County picked-up where the market left off at the end of 2021, with a median price of $1,250,000 for Single Family Residences (SFR). The number of active listings was at an all-time low to start the year and that kept quite a few buyers on the sidelines waiting for more and better choices.
As more listings hit the market in February, more buyers hit the streets and the resulting competition ratcheted-up the intensity well-beyond anything the market experienced in 2021. February ended with the highest prices ever recorded for SFRs – by a wide margin.
The median rose to $1,380,000, up $320k (almost 30%) year-over-year from February of 2021, That was $80k higher than the previous all-time high in May of 2021! The average price for SFRs also jumped to a record high of $1,581,486. And yes, you can go ahead and say it out loud if you want: “An average home in Santa Cruz County now costs more than a million five!” ) In the condo/townhome category February’s median price of $840,000 was just off the all-time high median of $860,000 in January.
So buyers, read ‘em and weep. If you’ve been waiting patiently for the market to downshift, your patience will continue to be sorely tested. Even though there are plenty of reasons why the market could slow down right now: a new covid variant, high inflation, higher gas prices, increasing stock volatility, rising interest rates and war in Ukraine, none of those things seems to have had any effect.
In some ways they represent a perfect storm of factors all pointing towards the value, the importance and continued desirability of “home”.
What do people do during a global pandemic? They shelter-in-place at home. What’s a good hedge against inflation? Real estate. What’s a great strategy during times of volatility? Brick and mortar investment in homes! Gas prices shooting up? More reason to stay closer to home. Interest rates on the rise? More reason to lock in before they go higher. What is clear from all those images CNN is sending back from Ukraine? Home is worth fighting for!
To be continued…