First, your timing on buying a home can be variable or fixed. If it’s fixed, book your trusted advisor call with us so we can collaborate to create the best strategy for your home purchase. With a knowledgeable advisor who is a skillful communicator and a high-level negotiator, you can optimize your buying experience.
If its variable, well, you might want to be patient, especially if you are all cash or have a large down payment. That’s if our county follows the statewide predictions. If it doesn’t, you might want to get serious about buying. Tough call.
Where are we now with Santa Cruz County SFR homes?
- Prices from October 2022:
- Median sales price for SFR up 18.95% from last year. (it’s up only 1.6% for the state)
- Average sales price for SFR up 14.4% from last year.
- Sales: 36% reduction in homes sold from last year.
- Homes in escrow: dropped 32.9% from last year.
- Inventory: 94% increase in inventory from a year ago, that’s big.
- Interest Rates are up to around 7+% from 3.2% in January
- 99.6% sales price / list price ratio (under 100% for first time in 27 months)
Where are we going in 2023?
- California Association of Realtors Forecast the following:
- Existing SFR home sales are forecast to decline by 7.2% in 2023 from 2022
- The median home price is forecast to decline by 8.8% in 2023 from 2022
- Housing affordability Index (HAI) is expected to drop to 18% from 19%
- CAR’s president says:
- As sellers adjust their expectations, well-priced homes are still selling quickly. And for buyers: more homes for sale, less competition, and fewer homes selling above asking price, all point to a more favorable market environment for those who were outbid or sat out during the past two years when the market was fiercely competitive.
Are you renting and wondering what it would take to buy a home in Santa Cruz County?
- There are nearly 40,000 people renting in Santa Cruz County.
- As if mid-2022, Santa Cruz is second only to San Francisco as the most unaffordable rental housing market in the US according to the National Low Income Housing Coalition’s annual report: 2022 Out of Reach: The High Cost of Housing.
- To afford an average $3138 monthly cost of a two-bedroom apartment in Santa Cruz County, a renter would need to earn $125,520 per year according to the report. This is based on 30% of renter’s income spending cap for rent.
- The roughly equivalent mortgage payment of $3231 (PITI) will buy a $500k house. This is at current interest rates of about 7%, with 20% down of $100k and credit of 740+. Can you find a home for sale for $500k? Likely only a low-income unit. And $125k is not low income. What to do?
- To buy the median priced home or $1,349,000, you would need, for a 20% down payment: $269,800. Your PITI Payment would be approximately $8734 (740+ credit score at 7% interest rate)
Yikes! Santa Cruz is a tough market. Even more reason to have a skilled, experienced, market savvy and high-level negotiator, a true leader to serve as your trusted advisor to ensure you are getting the best deal possible on the purchase of your home. Book your trusted advisor call with us and give us the opportunity to earn your trust and confidence.