Weekly Stats

Active inventory decreased by eight after an exceptionally strong week last week. This is because new listings also decreased off of a high last week and more homes got into contract (47). Mortgage rates had another significant 31 basis point hike this week, and surpassed 7% for the first time in the weekly data since October of last year. As for the 30 days numbers, the Median and Average prices stayed fairly flat. Meanwhile, Days on Market increased for the first time in 6 weeks. % over asking price decreased slightly compared to last week’s 30-day numbers and Price/Sqft increased by just $3.

Interestingly, the mortgage rates hiked this week despite a recent debt ceiling agreement. When the dust settles (and it passes Congress), one would think that that would have a positive impact on mortgage rates. TBD. We may have found a new, temporary, plateau in pricing in the $1.3M range. The average price is very strong. This is an indication that the high-priced market is still churning. What has become obvious is that cash buyers have a HUGE advantage in the buyer market. For buyers looking for primary homes or second homes, cash buyers aren’t as affected by mortgage rate fluctuations. For investors, cash allows you to cash flow and hold for appreciation while borrowing investors struggle to find deals that pencil.

Market Stats

May, 2023

Below are the Santa Cruz County Market Statistics for April ’23. Here are the highlights:

– Active Inventory increased by 13.7% from March ’23 to April ‘23. Active Inventory is up 11.5% from April ’22.

– The median SFH sales price for April was $1.35M, up 13.4% from the month prior. April ’23 median home price is down 4.3% from April ’22.

– Number of Sales decreased by 20.8% from March ’23 and is down 58.2% from April ’22.

– Days on Market in April ’22 was 15. Days on Market in April ’23 was 38.

April gave some interesting data points that can help show where we are and where we are going. The first thing that becomes clear when looking at the data is that the real estate market has been very slow. Mostly the result of raised interest rates, uncertain market conditions, and a lack of supply in our market. Just look at the difference in closed sales between the 76 homes closed in April ’23 and the 182 homes closed in April ’22. The second thing we can glean from the data is that demand is increasing. The median home price is up over 13% since last month, the average price is up over 7%, and homes are 7 days selling quicker, on average. Projecting out where our market is going, let’s start with the short to midterm. Over the next three months, demand will continue to rise until peaking in mid to late summer. Supply will continue to be suppressed as homeowners hold onto their artificially low rates. Long-term new inventory supply is going to continue to be historically suppressed resulting in upward pressure on pricing.

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