Explore the positive indicators in the real estate market as it emerges from a challenging period. Lower mortgage rates, increased listings, and a rise in sales suggest a potential turnaround, but experts caution that full normalization may take time.
Hi, I’m Shemeika Fox, your Santa Cruz Real Estate Expert and personalized Real estate concierge.
After a challenging period, the frozen housing market is showing signs of a thaw. Mortgage rates have seen a significant drop, with rates falling from above 7% to the mid-6% range in December. This notable shift has jump-started home sales, leading to a 34% spike in mortgage applications for the week ending Jan. 19, according to Mortgage Bankers Association data.
The positive momentum continues with an 8% increase in new-home sales and an 8.3% rise in pending home sales from November to December, as reported by the U.S. Census Bureau, the U.S. Department of Housing and Urban Development, and the National Association of Realtors®. While mortgage applications are still down year over year, new-home sales show a 4.4% increase, and pending home sales are up 1.3%.
Realtor.com® Chief Economist Danielle Hale notes, “We’re at a turning point,” suggesting the market may open up further in the coming months. However, she remains cautious about declaring a full housing market comeback, especially considering a 1% dip in existing home sales in December.
The improvement in the housing market is largely attributed to lower mortgage rates, making homeownership more attractive. Despite the positive signs, Danielle Hale emphasizes the importance of monitoring mortgage rates, which could be a determining factor for the market’s future trajectory.
Mortgage rates are expected to remain above 6% this year, even if the U.S. Federal Reserve cuts interest rates. While rates may experience volatility, the impact of lower rates has been significant in energizing the housing market.
Affordability remains a challenge, as rates, though lower, are still above the mid-2% lows seen in 2021, coupled with a median list price of $410,000 in December. Charlie Dougherty, senior economist at Wells Fargo, highlights that home prices continue to rise, impacting overall affordability.
Did you know though, that your rate is not locked, or guaranteed, until you are in contract to purchase your new home? What does that mean for you? That means, you can watch the rates as much and as closely as you would like, and they will actually not have any impact on you until you have an accepted offer and the lender of your choice is able to lock your interest rate in preparation of closing.. I know many of you are “watching the market” and waiting for rates to drop.. And what if, when they drop we have an entire new set of home buyers who emerge.. This is the experts prediction. So, what if, you prepared yourself.. Have you been sitting on the sidelines waiting for the “right time to buy a home?” If so, I would like to challenge you to reach out. Call me so we can work on getting your pre-approval now.. Then, when you are shopping and do decide it is “the right time” to buy a home, you are prepared and have just been able to actually leverage the market in your favor… What I am saying, is be a leader and take advantage of this shift in the market!! If you wait, you will be one of many and I mean many, who have waited for the “right time to buy” which means you will have a lot more competition.
Ok, I hope that was the pep talk you needed to hear!! Call me so we can talk strategy and put you ahead of the curve!
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One significant obstacle in the housing market, the shortage of homes for sale, is gradually being alleviated. Active listings rose by 8.6% in the week ending Jan. 20 compared to the previous year, according to Realtor.com data. Homeowners are listing their properties, encouraged by lower rates, and builders are contributing to the market’s stability with a projected 5.5% increase in single-family home construction this year.
Despite a challenging 2023, the housing market is showing positive signs of recovery. Real estate experts, including Danushka Nanayakkara of the National Association of Home Builders, express optimism about the market stabilizing and sales rebounding.
Real estate broker Matt Curtis notes a noticeable shift since December, with more homeowners listing their properties and open houses drawing eager buyers. While affordability remains a concern, there is a collective sense of optimism that 2024 will see a more normalized housing market reminiscent of 2018 and 2019, albeit with expectations of a somewhat sluggish pace.
Now, lets look at the housing numbers for Santa Cruz for January 2024!
The median sales price for Single family homes throughout the County of Santa Cruz came in at: $1,160,000. This is up just over $100 thousand from December 2023, when the median sales price for single family homes came in at $1,050,000. the average sales price for January 2024 came in at: $1,267,119. Which is down slightly from December 2023- $1,382,876.
The average days on market came in at 47 days on market which is up from 44 days in market in December 2023. The number of active listings for January was 201, down slightly from 207 in December 2023.
And the number of sales came in at 58 closed transactions in January down significantly from 81 in December 2023. Interesting statistics.
Now lets take a look at the Santa Cruz stats for Condos and Townhomes right here in Santa Cruz County! The median sales price for January 2024 is $729,000 with is down slightly from $780,000 in the month of December 2023.
The average came in at: $797,489 which is down about $100 thousand from December when the average sales price for condos/townhomes in Santa Cruz County came in at: $896,543.
The average days on market came in at: 36 days, which is up just slightly from December 2023 when it was at 31 days on the market.
The number of active listings for January was 55, which is down from December when the number of active listings was 61. And the number of sold condos/townhomes was down from 25 in December 2023 to 19 in January 2024.
We do seem to be getting more inventory as the year progresses, my estimation is that with lower interest rates and a bit more consumer confidence, we will see some more inventory. Not enough to completely satisfy the buyer demand, but some, maybe enough to make a dent~! So if you are thinking about selling your home, or whether now is the “right time” to buy, give me a call so we can navigate this market and strategy together!
It is crucial to have an expert in your corner. I’m Shemeika Fox, your Santa Cruz Real Estate Expert and personal real estate concierge and as always, I am here to help!
