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 Pasatiempo real estate market, along with the rest of the Santa Cruz County, has fallen off substantially from its peak in 2007, although it has started to post a tentative recovery in recent months. A July 19, 2010 report from the Santa Cruz Sentinel noted one example of this new housing market: “Patricia Beckwith bought a three-bedroom house on a third of an acre in Aptos for $444,000 after waiting more than three years for prices to fall. “It felt like a miracle,” she said. “This is the house I’m going to live in for the rest of my life.” Beckwith, 46, an accountant, found a longtime homeowner ready to downsize. “She never refinanced,” Beckwith said. “She didn’t need to command an overinflated price.” Beckwith put 20 percent down, got 5.25 percent interest for 30 years, and qualified for an $8,000 federal tax credit, a $10,000 state tax credit and a tax credit through the Housing Authority of Santa Cruz County. She had been watching the local housing market since January 2007. That’s when the median home price in Santa Cruz County dropped to $702,250 after peaking in July at $775,000. How times have changed. Beckwith bought in June, which saw 149 home sales, down from 162 a year ago. The median, the midpoint of what sold, was $507,500…The median reflects the mix of sales: 49 percent under $500,000 and only 5 percent more than $1 million. About 44 percent involved bank-owned homes and “short sales,” where the lender accepts less than what is owed. Gangnes noted 38 percent were sold in Watsonville and San Lorenzo Valley. Those two areas, traditionally more affordable, have seen more foreclosures and plummeting prices.”
There is economic hope for Pasatiempo houses for sale and the rest of Santa Cruz County, however, as the primary source of county income, property taxes, may finally be stabilizing. According to a June 27, 2010 article from the Santa Cruz Sentinel, “Is there any hope things will get better? For a county that doesn't depend on businesses to carry the tax load, that means property tax revenue will continue to be the key to recovery. Hopefully, the situation regarding property assessments -- home valuations -- is getting better and the worst of the foreclosure/short-sale crisis is behind.”
The Felton housing market, part of the larger Santa Cruz County real estate market, saw a slower rate of growth in the month of June despite much stronger signals in the month of May 2010. Experts are hopeful that the pace of the market will recover and regain strength in the upcoming weeks. According to a July 14, 2010 article from KSBW News, “In Santa Cruz County the housing market sprang to life in May, but sales slowed in June and now realtors said they are hoping the market will improve during July and August. The median home price in Santa Cruz County during June was $503,750, down 3.1 percent compared with last year. Condominium sales, meanwhile, were up 11.8 percent in June with a median price of $369,000, according to state data. Despite lower prices and low mortgage rates, Natasha Feldthouse of Santa Cruz said she plans to wait until winter before buying her first home. "I think there there's a lot of inventory, and I think that it's OK to be looking in the summer, but I think it's better to make a transaction during the winter," Feldthouse said…Mortgage consultant Noel McCord said interest rates are at the lowest rate he has seen in the past couple of years. A 30-year fixed loan rate is currently set between 4.374 and 4.5 percent. McCord said that the problem for people is that getting a loan is tougher than it has ever been…McCord said it is also a good time to refinance, but that underwriters will want a lot of information.”
In a sign that the housing market may have hit its bottom, the average value of Felton homes for sale and other Felton properties has begun to stabilize. According to a July 12, 2010 report from the Mercury News, “The chance to protest your property tax bill has arrived. But with thousands of homeowners already winning a tax break over the past two years - as home values plummeted - fewer requests for a reduced property assessment are expected during this year's filing window, which opened this month. For one, the real estate market appears to be stabilizing, meaning less reason for county assessors to revalue property. And two, the county has begun charging to apply for a property reassessment, a service that was previously free but now entails a $30 fee to cover handling costs.”
Commercial real estate in Capitola was still facing the residual effects of the economic downturn, although it lagged somewhat behind Capitola homes for sale. According to a July 7, 2010 report from the Santa Cruz Sentinel, “Unable to find a replacement tenant for Gottschalks at the Capitola Mall, developer and philanthropist Jack Baskin has defaulted on an $11.95 million loan and turned the two-story, salmon-colored building that housed the department store back to the lender. It's a sign of how the recession has taken a bite out of regional shopping malls. The building at 1825 41st Ave. is scheduled for a foreclosure sale at First American Title Insurance for 10 a.m. Tuesday, a year after the department store closed its doors. The sale notice, taped to a door at the rear, lists a $13.3 million debt owed by Baskin Properties LLC. Baskin referred queries to Robert Ridino, president and chief executive officer of SAR Enterprises in Aptos, which manages portfolio of investment real estate worth more than $200 million, according to its website. "While the word foreclosure' or notice of default' may have a negative connotation, the pending process is a completely cooperative action between lender and ownership," Ridino said. The default stems from a loan in which rents were assigned to the lender, Countrywide Commercial Real Estate Finance, which replaced Borel Private Bank of San Mateo in 2006, according to the Santa Cruz County Recorder's Office. That worked while Gottschalks was in business, but the 104-year-old department store chain filed for bankruptcy in January 2009, then closed six months later.”
The number of home sales in the Capitola real estate market increased substantially in the most recent tracking period available. Capitola, part of the larger Santa Cruz County market, saw a significant increase in home sales compared to year-ago levels. One hundred and sixty houses were sold in the month of May 2010, compared with one hundred in May 2009. The median price in the region declined over the same tracking period compared to month ago levels, although it rallied substantially compared to May 2009. The median price and the rate of home sales were still quite low compared to the peak of the market, and the recovery may be partially driven by the federal tax credit.
The Boulder Creek housing market, part of the larger Santa Cruz County real estate market, saw marked signs of improvement in the most recent tracking period. Although the numbers for the month of June are not yet available, the month of May demonstrated strong growth in the housing sector. The Santa Cruz Sentinel reported that one hundred sixty single-family houses were sold in May of 2010, a substantial improvement over the same time last year. While the figure was substantially higher than May 2009, it was still well off from the peak years. When the market was at its peak, even without the benefit of the federal tax credit, two hundred or more houses would be sold during the month of May. The median price of a Boulder Creek house for sale increased from May 2009, although it did drop from April 2010. In May 2009, the median price was $425,000, while in May 2008 the figure was above six hundred thousand dollars. Although the number was at $553,000 in April 2010, it fell slightly to $535,000 in May 2010. Home sales also seemed to be transitioning towards the middle of the market. While there were fewer home sales in the high end of the market, there were also less foreclosed properties and distressed short sales.
The entirety of California saw similar improvements in recent months. Nine of the ten areas with the highest median prices were in the Golden State, including Boulder Creek and Santa Cruz County. According to Sight on San Diego real estate insider, “How about in terms of home price? San Diego has the ninth highest median home price. The most expensive metro area? San Jose at $584,000. San Francisco is right behind at $526,300, followed by Santa Cruz at $507,000 and Santa Barbara at $450,400. Again, if it seems all about us, it is. Of the 10 metro markets in terms of median home price, nine are in California. The metro area with the lowest home price is Detroit at $85,300. Next are Toledo at $94,100 and Dayton at $101,300.”
The Aptos real estate market, part of the larger Santa Cruz County housing market, is starting to show signs of strength and improvement in the most recent tracking period. The housing market had an impressive showing in the month of May, with the most homes changing hands since the peak of the market in 2006. The number of sales, 160, was still substantially short of the 200 property a week high reached during the apex of the market. Only a slim minority, less than five percent, of homes sold topped the one million dollar mark. About 40 percent of sales involved bank-owned homes and short sales in santa Cruz where the lender accepts less than what is owed. In the entire Santa Cruz region, including Aptos, about forty percent of the housing market was short sales or foreclosures. However, one particular expert in the area reported several high-end transactions, none of which involved foreclosures or distressed properties. Essentially, the Aptos housing market is rebounding from a bottom reached earlier this year, although it is still well short of earlier highs.
Aptos houses for sale and condominiums for sale should benefit from an effort to boost tourism. The tourist sector is one of the largest in the Santa Cruz region, and is quite important to the overall economy of the region. According to a June 22, 2010 article from KION 46 News, “They also beefed up their internet ads, offering free trips to Santa Cruz on their website, ‘Occupancy is at an all time low in about 20 years. In 2009 we ended the year at 51% that's 5-1 in Santa Cruz County, that's not good. So we knew coming into the spring that we needed to be extra aggressive,’ Ivy explained. Lodging sites and some local businesses are footing the bill for the ads, buying into to the theory you have to give cash to make cash, ‘That means were focusing those dollars on the overnight business.’ Closing the sale is a big deal in this county, considering the average 3 day stay brings in $1800, totaling $650 million a year countywide.”
The average price of a Santa Cruz home for sale strongly recovered in the month of May, rebounding from much lower levels to well over a half-million dollars. According to a June 19, 2010 article from the Santa Cruz Sentinel, “The housing market sprang to life in May, with 160 single-family homes changing hands, the most in that month since 2006. Still, it's nothing like the boom years when sales in May topped 200. The median price, the midpoint for what sold, was $535,000, down from $553,000 in April. Last year it was $425,000; two years ago, it was $610,000. American Dream Realty, who tracks the data, noted 46 percent of sales were under $500,000 and 4 percent were over $1 million. About 40 percent of sales involved bank-owned homes and short sales where the lender accepts less than what is owed.”
The article by Jondi Gumz went on to note that the affordability of Santa Cruz homes for sale is improving, stating that “Bailey cited two factors in the uptick: Tax credits and affordability. During the boom, the Santa Cruz affordability index was 18 percent, so few had the opportunity to buy. Now the index is 44 percent. Loans insured by the Federal Housing Administration, which allow a smaller down payment, make up half the market, Bailey estimated, a dramatic change from three years ago when these loans were not available in Santa Cruz County. Bailey said the interest rate on a fixed-rate mortgage is "in the 4s," which is what borrowers got in an adjustable-rate loan three years ago. In other words, if borrowers can afford to buy, they need not worry about escalating payments.”
This strength relative to the rest of the region may be a result of a shallower recession than surrounding communities. According to a June 17, 2010 article also in the Santa Cruz Sentinel, “Taxable sales in Santa Cruz County dropped 17 percent in the second quarter of 2009 compared to the year before; the statewide decline was 19 percent…Santa Cruz fared better than other cities in the county, with a drop of 11.9 percent in taxable sales compared to 16.4 percent in Watsonville, 19.5 percent in Capitola real estate sales and 30 percent in Scotts Valley real estate.”
Santa Cruz real estate market appears to be stablizing and the amount of sales continue to increase over 2009.