Weekly Stats

In the battle of dueling forces in form of low supply and low demand, low demand is presently winning. This continues to push prices down. Active Inventory rose for the second consecutive week. Expect that to continue and when it does, it’ll ease the impact that low new inventory has on pricing. Speaking of new inventory, New Listings inched upward and should continue to in the coming months. Mortgages rates rose slightly and have now hovered in the 6.2%-6.3% range for four weeks. Homes under contract rose while homes closed fell. As for the 30-day numbers, Median home price dropped by over 4% compared to last week’s 30-day numbers while Average Price stayed fairly flat. The sample size continues to be small with only 67 single-family homes closing in the last 30 days. Days on Market took another big jump and has now surpassed 50 days for the first time in years. % over asking price decreased again and is approaching -10%. Price/Sqft dropped 5%.

With fewer buyers in the market, there is less competition for homes. Therefore, homes are staying on the market longer and going for less. This creates a highly leveraged position for buyers that are still actively searching. Under normal circumstances, homes going for nearly 10% under asking, on average, could only mean a market “crash”. However, a drop like this succeeding a truly rare run of increasing prices is pretty expected. Combine that with the fact that we have such a small 30-day sample size and an abysmal month of weather and it becomes highly predictable. What is also highly predictable is the increase in buyer and seller activity that will occur in the coming months.

So, buyers realize that this is a moment of opportunity in terms of leverage and sellers know that with a changing season, so should the number of buyers in the market.

Market Stats

January, 2023

Below are the Santa Cruz County Market Statistics for the month of December ’22. Here are the highlights:

– Active Inventory dipped 14.2% from November ’22 to December ‘22. Active Inventory is up 103.6% from December ’21.
– The median SFH sales price decreased to $1.16M from $1.24M the month prior. December ’22 median home price is down 3.3% from December ’21.
– Number of Sales decreased by 3.4% from November and is down 36.8% from December ’21.
– Days on Market in December ’21 was 31. Days on Market in December ’22 was 37.

December was the month of low activity. The combination of seasonality and high-interest rates contributed to the suppression of both supply and demand. That said, when compared to last year, buyers still had a lot more choices. More choices does not mean more NEW choices. The number of new listings in December was 70. That was the second lowest month in the last three years, only greater than December ’21. 2022 was the lowest number of listings on record! Interest rates have caused the market to slow as monthly payments become more and more costly. It has also caused sellers to hold off because why would want to trade in your mortgage rate for a much pricier one? The good news is that there is evidence of cooling inflation. If that evidence continues to compile, expect the mortgage rates to eventually fall and buyers to rush back into the market.

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