Santa Cruz Real Estate News & Updates
Santa Cruz real estate market trends and updates on the ever changing real estate market in Santa Cruz County from Realtors and brokers.
The Aptos real estate market, found in Santa Cruz County, continued to face disappointing news and statistics in the last two months. Foreclosures continued to exert a disproportionate influence over the Aptos housing market, and the median sales price in Santa Cruz County spiraled downwards in both January and February 2011. In early 2010, the median price in the County was $500,000 – Santa Cruz has always had much higher average property values and prices than the rest of the state, partially by virtue of its location. However, in the two most recent tracking periods, the median sales price fell to just $450,000, falling closer to the lowest recorded figure for February, which is $380,000. The decline in sales price is largely attributable to the preponderance of foreclosures in the region. The Santa Cruz Record reports a total of more than three thousand foreclosures over the last two years. Since foreclosures and short sales are routinely sold for more than the average sales price or property value, the fact that foreclosures are so common helps to depress median price.
One clear sign of distressed properties’ influence on the market is the percentage of purchased properties that were at some stage of the foreclosure process. For instance, in February 2011, out of the 95 properties that changed hands, fully 48 percent of them were either short sales or bank foreclosures. According to the Santa Cruz Sentinel, 57 percent of the condominiums sold over the same time period were in the same situation. There is one potential bright spot for Aptos real estate – the number of new foreclosure filings in February was well below the volume reached last year. While February 2010 saw 400 notices of default, there were ‘only’ 300 in February 2011. This may be an indicator of a potential backlog in banks attempting to offload foreclosures, or alternatively a testament to how many property owners are choosing to execute short sales before the foreclosure process is complete. Still, since the beginning of the economic downturn in 2008, nearly 8,000 properties have been foreclosed upon throughout Santa Cruz County, with a cumulative value of approximately four billion dollars.
The Santa Cruz real estate market continues to be seriously troubled as foreclosures pile up and the double dip housing recession seems more realistic than ever. The region saw an anemic volume of home sales in the most recent tracking period, as well as historically low median sales prices and extremely high rates of foreclosure. Santa Cruz generally has housing prices considerably higher than the rest of the state, although in February the median price declined substantially compared to year ago levels. February 2011 saw a median single family home sales price of $450,000, representing a decline of about $50,000 from February 2010. This figure is still higher than the trough of the market, when the February median sales price was $380,000, largely in response to a flood of foreclosures in the region. It is possible that the decline in median price is indicative of an impending double dip in the Santa Cruz housing market, or possibly just an expected seasonal weakness. January and February are normally the weakest months of the year for Santa Cruz in particular and California in general. Foreclosures have substantially depressed median price over the last two years, totaling more than three thousand in the last twenty four months.
There were less than one hundred single family homes sold in the entirety of February 2011, of which nearly fifty percent were at some stage in the foreclosure process. There were twenty three Santa Cruz County condominiums, of which almost sixty percent were either bank owned or short sales. Throughout January and February, more than half the properties sold were purchased for less than half a million dollars, although twelve percent were bought for more than a million dollars. It is possible that the market has finally bottomed out, although foreclosures are still enough of a problem in Santa Cruz County to cause a protest outside of the local Wells Fargo office in response to the so called robo-signing scandal. On the bright side, unemployment in Santa Cruz County declined slightly in February 2011, falling 0.1 percent from January 2011 and about one percent from February 2010. Still, nearly fifteen percent of Santa Cruz County residents remained unemployed.
The Capitola housing market has been generally tepid since reaching a low point during the economic recession. Commercial property has started to recovery from the downturn, although the median price of Capitola homes for sale has remained mostly unchanged over the last few months. According to a September 13, 2010 report from the Santa Cruz Sentinel, “Four months of courting Target Corp. paid off Monday for City Manager Jamie Goldstein, who announced the retail giant has applied to renovate a 100,000-square foot space vacated by Gottschalks at the Capitola Mall. “This is a real piece of good news,” Goldstein said, noting the arrival of Target, the nation’s second largest discount retailer, on busy 41st Avenue could mean a “significant number” of jobs, construction work and fill a shopping space that’s been empty for more than a year with affordable products…Capitola resident Christine Buechting, a financial advisor with Edward Jones and a member of the city’s financial advisory committee, welcomed the news….It could mean a half million dollars a year in sales tax revenue, based on an economic study done for Scotts Valley.”
The median price of a Capitola home for sale recovered temporarily during the summer months, but has again retreated, according to a September 15, 2010 article also in the Santa Cruz Sentinel. This report noted that “The median price was $510,000, little changed from $500,000 a year ago, according to agents, who tracks the numbers, but down from three years ago when it hit $770,000. Listings have grown and interest rates are at historic lows, but buyers are not biting. There were 152 single-family home sales, little changed from 154 a year ago. Homes under $500,000 made up 46 percent of sales, with those selling for more than a $1 million comprising 8 percent. About 1,200 homes in the county are in foreclosure, compared to less than 1,000 a year ago. Most of them end up either in a short sale or owned by a bank, which puts more downward pressure on prices. Even million-dollar homes have been lost to foreclosure. "I've never had a market with such a large loss of equity," said Paul Bailey, co-owner of Bailey Properties and a real estate agent since 1975. Banks are demanding loan applicants provide proof they can pay the money back.”
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The Boulder Creek real estate market, part of the larger Santa Cruz County real estate housing market, continues to suffer from a generally lackluster economy. Despite a drop in the unemployment rate, the size of the workforce declined in August and remained well above the national rate. According to a September 18, 2010 report from the Santa Cruz Sentinel, “Santa Cruz County unemployment dipped in August to 11 percent, down from 11.3 percent in July, but up from a year ago, when it was 10.2 percent. The reason: not job growth, but a smaller labor force. The jobless rate remained steady nationwide at 9.5 percent and inched up to 12.4 percent in California. "Californians are continuing to suffer from slow job growth, and things will only improve when there is strong hiring in the private sector," Gov. Arnold Schwarzenegger said. Most private-sector industries in Santa Cruz County have a long way to go to recover jobs lost since last August. Real estate, rental and leasing are down from 1,400 jobs a year ago to 1,200. Membership at the Santa Cruz Association of Realtors is 1,227, down from 1,283 a year ago, according to executive director Kathy Hartman.”
This economic instability has been affecting Boulder Creek homes for sale for a while, as reported in an August 25, 2010 article from the Santa Cruz Sentinel. The piece, composed by Jondi Gumz, noted that “Homebuyers made themselves scarce in July, even though it's usually the biggest month of the year for sales. American Dream Realty, reports there were 145 single-family home sales in Santa Cruz County this July compared to 175 in July 2009. That's not a record low, but it's close. The record is 143 sales in July 2007, a month before the credit crisis exploded. July's median price was $510,000, down from $775,000 three years ago, but sales haven't taken off. Despite falling prices and record low interest rates, agents say prospective buyers are reluctant to commit, worried that foreclosures will bring the housing market down. About 49 percent of sales were for under $500,000; only 6 percent were over $1 million.”
The Watsonville real estate market is seeing improvements in some areas, much as the rest of Santa Cruz County. The commercial real estate sector of the market has picked up somewhat, although the industrial market is having continued trouble and Watsonville apartments are becoming more important for the market than Watsonville homes for sale. An August 23, 2010 report from the Mercury News found that "Office vacancies dropped back down to last year's levels and rents climbed slightly but the opposite was true for warehouse and manufacturing markets, which saw a climb in vacancies and a drop in rents, according to the latest quarterly report on commercial space by Cassidy Turley/ BT Commercial...After closing in on 1 million square feet a quarter ago, total office availability in the county dropped to 922,000 square feet, according to CT/BT. In the second quarter, office vacancies were still elevated, dropping only to 12.4 percent in the from 13.1 percent in the first quarter. CT/BT related the drop to a corresponding drop in the local unemployment rate...Santa Cruz, however, had a slight increase in vacancy to about mid-16 percent; Mid County saw a minor decrease remaining in the high 6 percent range; and Watsonville reported a noticeable decline to below 5 percent. More than 90 percent of the 203 listings countywide are less than 10,000 square feet."
Watsonville apartments for sale have become more attractive investments lately, according to an August 16, 2010 article from the Santa Cruz Sentinel. The piece by Jennifer Pittman noted that "In the Silicon Valley, there were no apartment building sales recorded during the first two quarters of 2010, but sales have been reported in the current quarter, according to RealFacts, an apartment data research company. According to RealFacts, there hasn't been an apartment property sold since 2007. The company, however, doesn't track data relating to complexes of fewer than 50 units and there are only about a dozen properties in Santa Cruz County with more than 50 units. In Santa Cruz County, where building is limited, there should be a "swelling of demand for rental properties," Fletcher said."
Soquel, found in Santa Cruz County, California, faced a sharp decline in the number of home sales in the month of July. The median price of Soquel homes for sale remained quite low relative to a few years ago, and the continued crisis has taken a toll on the elderly in particular. According to an August 24, 2010 report from the Santa Cruz Sentinel, "Homebuyers made themselves scarce in July though usually it's the biggest month of the year for sales...single-family home sales in Santa Cruz County dropped from 175 in June to 145 in July. That's not a record low, but it's close. The record is 143 sales in July 2007, a month before the credit crisis exploded. July's median price was $510,000, down from $775,000 three years ago, but sales haven't taken off. Despite falling prices and record low interest rates, agents say prospective buyers are reluctant to commit, worried that foreclosures will bring the housing market down another peg. About 49 percent of sales were for under $500,000; only 6 percent were over $1 million. With listings up and sales down, it would take 7.6 months to deplete the current inventory, nearing the eight-month point where there's pressure to lower prices...In Santa Cruz County, 41 percent of single-family sales and 45 percent of condo sales in July were bank-owned or "short sales," where lenders accept less than the amount owed on the mortgage."
The Soquel housing market has become so negative that the elderly and other vulnerable portions of the population are facing losing their homes. According to an August 13, 2010 article in the Santa Cruz Sentinel, "That’s because she’s among the 120 Santa Cruz County participants in the California Senior Citizens and Disabled Citizens Property Tax Postponement Program. The program, which started more than 30 years ago, allows elderly homeowners who meet income guidelines to postpone paying property taxes. The state paid the taxes to the county and a tax lien was placed on the property; The state collected the taxes when the home was sold, usually when the homeowner died. Because of the recession and housing crisis, the program began losing millions...When the program was suspended, it had about 5,700 participants statewide and a balance of more than $100 million, according to the controller’s office."
The Scotts Valley real estate market, found in the midst of Santa Cruz County, continues to face a number of challenges despite a distinct bright spot in the apartment investment market. According to an August 16, 2010 report from the Santa Cruz Sentinel, “In the Silicon Valley, there were no apartment building sales recorded during the first two quarters of 2010, but sales have been reported in the current quarter, according to RealFacts, an apartment data research company. According to RealFacts, there hasn't been an apartment property sold since 2007. The company, however, doesn't track data relating to complexes of fewer than 50 units and there are only about a dozen properties in Santa Cruz County with more than 50 units. In Santa Cruz County, where building is limited, there should be a "swelling of demand for rental properties," Fletcher said. The Tropicana property, which houses eight one-bedroom units and 29 two-bedroom units, was 100 percent occupied. Rents ranged from $1,000-$1,195, according to Kay. The Mid-County location near the beach was a definite draw, but, the building, built in 1957, wasn't exactly a marketing dream. While "the bones of the building" were solid, it needed paint and some updating…Local developer Bill Brooks, however, hasn't seen much change in the apartment market because rents haven't dropped significantly. The biggest impact for him has been that the housing market has slowed and several condominium and housing developments have turned into rental units by default.”
This decline in Scotts Valley homes for sale is causing a fiscal pinch for many county services in the region, many of which are already under stress. A July 29, 2010 report also from the Santa Cruz Sentinel found that “Property taxes, a key source of income for cities and schools and a bellweather of the local economy, are on the decline in Santa Cruz County for a second straight year. The county Assessor's Office, meeting an Aug. 1 deadline, closed the books this week on the value of homes, offices and shopping centers countywide, recording a 0.6 percent drop in total property value over the year before. While the new figure means hundreds of property owners will owe less tax when October bills arrive, the lower roll also means struggling city and county governments, schools and dozens of special districts providing fire, water and sewer services will see another year of diminished revenue.”
Aptos, California, is an unincorporated area in Santa Cruz county made up of several small communities in the northern area of the state. The combined population of the communities that make up Aptos is estimated at around 25,000. There area is surrounded by beaches, mountains and forest, and is a popular destination for those looking for homes in the area in smaller, more residential areas.
Like so many other communities in the Santa Cruz real estate market, the Aptos real estate market took quite a hit with the onset of the economic recession in 2008. As housing prices fell across the country, so too did they fall in Aptos. Many homeowners were personally affected by the crisis and found themselves unable to pay for the homes they had purchased, thus causing the number of foreclosures in Santa Cruz to rise, adding to excess inventory.
In the past year or so, the Aptos market has shown some signs of improvement, but its most recent statistics show that it is still a very volatile market, with prices repeatedly rising then falling. According to the Santa Cruz County Real Estate Association, which tracks real estate figures for cities in the county, June 2010, the most recent month for which Aptos statistics are available, showed year-over-year declines in almost every category in single-home sales. Inventory of homes for sale in Aptos rose annually to 73 in June versus 60 a year earlier. The number of monthly sales fell annually from 13 to eight; nonetheless June's sales showed an improvement over May's, when only two Aptos homes were sold. The number of days homes spent on the market before selling rose as well, standing at 190 days in June versus 108 a year earlier, and suggesting that those interested in or needing to sell their home in Aptos should be patient. Both the median and average prices of homes sold in June fell from a year earlier: The average sales price was $565,600, down form $666,000, while the median price was $582,500, down from $621,000 a year prior.
The market for condominiums and other community complexes in Aptos fared better in June than did single-family homes. Inventory of these properties has fallen to just five for sale on the market, down from 18 a year earlier. With the small inventory, sales have also remained small, with just a single property sold in June, similar to May and only changed from last year's two sales by a single figure. The number of days properties spent on the market fell, triggered by the rapid sale of June's only sale after just seven days on the market. The median price for these homes saw a slight rise from a year earlier. In June, it stood at $490,000, up from $485,500 a year earlier.
The county seat of and largest city in Santa Cruz County sharing its name, Santa Cruz, California, is located in the San Francisco Bay area of the northern part of the state, about 70 miles south of the city of San Francisco on Monterey Bay's northern edges. The city was estimated to be home to a population of more than 56,000 in 2008, with a median annual household income level around $50,600. Like so many cities, particularly those in California, the Santa Cruz real estate market has taken a hit over the past several years since the onset of the financial crisis and the subsequent world recession. The market saw its inventory soar as the number of foreclosures in Santa Cruz rose, and the oversupply sent prices tumbling down even as many potential buyers were unable to secure financing to buy their much-coveted homes.
The Santa Cruz market has come a long way since the beginning of the recession, and many improvements have been seen this year and in the latter part of 2009. Nonetheless, there are still many fluctuations in the market so buyers and sellers must monitor facts closely.
In June, the most recent month for which statistics are available from the Santa Cruz County Association of Realtors, there were 72 new listings for single-family homes, virtually steady from May, when there were 73, but down year-over-year from 85 in June 2009. Despite a lower number of new listings, total inventory in June was higher than it was a year ago and a month ago, with 235 homes for sale in Santa Cruz on the market. Sales of single-family homes were also down, with only 30 sales in June versus 55 in May and 68 a year ago. Prices also still show signs of suffering; both the average and median prices of homes sold in June were below the figures from the previous month and the previous year. The average price in June was $643,000 while the median sales price was $590,000.
Despite struggling signs in the Santa Cruz market for single-family homes, its other market segment, "common interest developments," showed more signs for optimism. Listings remained constant; in June, there were 18 new listings, compared with 20 in May and 17 in June 2009. Inventory stood at 85, down by three from May but up by 20 year-over-year. There were 12 of these properties sold in June, more than double May's sales of just five, and down only slightly from a year ago, when there were 13 sold. The largest improvement in the common interest developments market was in the average number of days properties spent on the market before selling. Last year, the figure was 120 days, and in May it was 157 days. In June, it was just 47 days. Likewise, both the median and the average price of properties sold has risen month-over-month and year-over-year. The average price in June was $401,600 while the median price was $399,500.