Welcome to the January, 2021 National and Local Santa Cruz Real Estate Housing Market Update. This is a wild and crazy real estate market. And here at Fox Group, we believe that education plays a huge part in our client’s success. So let me share a little bit about what we are experiencing both nationally and locally, right here in Santa Cruz in the housing market.
I’m Shemeika Fox, your Santa Cruz Real Estate Expert. I found these four expert views on the 2021 housing market quite enlightening, so I wanted to share them with you. Many Americans are worried about yet another crash like we experienced in 2008, 2009, because of the current housing frenzy. We are now seeing a market that is very similar to what happened prior to that housing market crash.
So what are the experts saying? Let me share with you some quotes from real estate industry-leading experts to help sum up what to expect. Lawrence Yun, and if you’ve never heard him speak, he’s brilliant. The Chief Economist for the National Association of Realtors says, and I quote, “In 2021, I think rates will be similar or a modestly higher, maybe 3%. So mortgage rates will still continue to be historically favorable”. And Danielle Hale, Chief Economist of Realtor.com says, “We expect sales to grow 7% and prices to rise another 5.7% on top of 2020s already high levels”. And what about Senior Vice President and Chief Economist of National Association of Home Builders? He says, and I quote, “With homebuilder confidence near record highs, we expect continued gains for single-family construction. Albeit at a slower growth rate than in 2019, some slowing of new home sales growth will occur due to the fact that a growing share of sales has come from homes that have not started construction. Nonetheless, buyer traffic will remain strong given favorable demographics, shifting geography of housing demand to lower density markets and historically low-interest rates”.
Key housing market takeaways for 400 plus US Metro areas during the four week period ending December 2020. The median home sales price increased 14% year over year to $320,714. Pending home sales were up 34% year over year in the single week ending December 2020. Pending sales were up 30% from the same week a year earlier. New listings of homes for sale were up 12% from a year earlier. Active listings, the number of homes listed for sale at any point during the period fell 31% from 2019 to a new all-time low. 39% of homes that went under contract had an accepted offer within the first two weeks on the market. Well above the 26% rate during the same period a year ago. The average sale to list price ratio which measures how close homes are selling to their asking prices declined slightly to 99.4%. Still one and a 1/2 percentage points higher than a year earlier for the week ending in December 2020.
The seasonally adjusted Redfin Home Buyer Demand Index, a measure of requests for home tours and other services from Redfin agents was up 23% from pre-pandemic levels in January and February. Mortgage purchase applications decreased 5% week over week seasonally adjusted and were up 26% from a year earlier unadjusted during the week ending December 18th. For the week ending December 24th, 30-year mortgage rates fell 2.66%, another new all-time low. Rates have been below 3% since July.
What does this mean locally right here in our Santa Cruz real estate market? No winter cool off, that’s for sure. The local real estate market is staying hot. Driven by high demand, coupled with low inventory and continued low-interest rates. The real estate market in the five MLS counties maintained its blistering pace during November. Closed sales improved in all counties over the same month last year. In fact, November activity in San Benito and Santa Clara Counties was at its highest in 11 years. In Monterey and San Mateo Counties, the last time November had this much activity was in 2012. And Santa Cruz had its the best November since 2017.
In Santa Cruz County the median single-family home costs $1,050,000 and sold in eight days for 103% of the list price, based on 165 sales in November 2020. Inventory was down 20% from October and down 32% from November 2019, with 283 homes available, compared to 417 homes last year. Average days on market decreased by eight days from 34 to 26 or 24%. Median days on market dropped two days from the month before. The number of new listings from the month of November decreased 37% over October and is up 56% from November of last year. Closed sales decreased 9% from October, from 182 to 165 homes sold. This is up 32% from new listings, were 12%, but the number of homes for sale fell 31% to a new all-time low.
So if you’re thinking about selling your Santa Cruz home or investing in the Santa Cruz real estate market this winter, reach out to us for a confidential, complimentary consultation. I’m Shemeika Fox, your Santa Cruz Real Estate Expert. And as always, I’m here to help.
Also, do note that these numbers are from November and December of 2020. As we roll into 2021, and we get our updated data points, I will be updating you with our Santa Cruz real estate Monthly Market Update, so stay tuned.
