Weekly Stats

Active inventory has increased for the third consecutive week and it’s not due to improved new supply. SFH new listings in the county were 169 for September; that’s the lowest September number in 15+ years. Mortgage rates hovered above 6.5% this week, up .05%. Homes under contract and homes closed both underperformed the YTD average. As for the 30-day numbers, Median and Average prices are down 3.68% and 4.92%, respectively. Months of Inventory jumped 21% to 2.3 in September. Days on Market is back above 30 while the percentage over asking increased after two consecutive 30-day decreases.

The numbers tell us that there is a lack of action on both the supply and demand sides of the market. Some can be chalked up as seasonal but this is now the fifth consecutive month where the new listings are the lowest or second lowest they’ve been for that specific month in 15+ years. Santa Cruz County is on pace for historically low new listings inventory. On the demand side, every metric trended toward cooling demand. Fewer homes are selling and getting under contract, 30-day prices decreased, DOM increased, and % over asking decreased. Any monthly optimism seems to be consistently knocked by monthly inflation numbers and increasing fed rates.

Market Stats

September, 2022

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

– Active Inventory started its yearly decline after peaking in July. Active inventory is down 4.04% from the month prior.
– The median SFH sales price increased to $1.30M from $1.25M the month prior. August ’22 median home price is up 3.8% to August ’21.
– Number of Sales increased by 22.7% from July but is down 32.7% from August ’21.
– Days on Market in August ’21 was 17. Days on Market in August ’22 was 29.

Shift happens quickly. Inflation and the government’s desire to combat it have certainly had an impact on the Real Estate market. While the market is different than last year, it doesn’t mean it’s not strong. The intense demand and consistent up-bids that occurred post-April ’20 were certainly not sustainable long-term and it took interest rates to pause the frenzy. That said, if you compare last year to this, the Median home price is actually up year-over-year. Homes are taking longer to sell and the price-to-list ratio is flirting below 100%. The price per sq/ft is up 3.1% compared to last August. On the supply side, new listings way underperformed historical August averages. The 176 new SFH listings in August were the second lowest in 12+ years (behind only August of 2020). The main culprits for low supply are higher interest rates and taxes (property taxes and capital gains tax). Each discourages house swapping. On the demand side, we seem to have found a level. The median home price bounced between $1.25M and $1.3M throughout the month. Buyer expectations have started to adjust to the times and when synergy occurs between expectations and reality, prospective buyers become real buyers. While some promising deflation signs occurred last month, this month’s data forced adjusted expectations. It’s safe to assume that raised rates will continue through the end of the year.

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