Santa Cruz Real Estate Market Update: July 2023
Welcome to the sun-kissed Santa Cruz real estate market update for July 2023. In this article, we’ll take a delightful summer stroll through the vibrant world of Santa Cruz’s housing market. As your Santa Cruz real estate expert and personalized concierge, I’m Shemeika Fox, here to provide you with the latest news and insights.
New Septic System Ordinance in Santa Cruz County:
The implementation of a new septic system ordinance in Santa Cruz County, starting from July 1st, 2023, has brought about important requirements for sellers of residential properties with septic systems. These requirements aim to ensure the proper functioning and disclosure of septic systems during the property sale process.
Under the new ordinance, sellers are obligated to have their septic system professionally pumped and inspected before selling the property. This step is crucial to assess the condition and functionality of the septic system. By conducting a professional inspection, potential issues or areas of concern can be identified and addressed, ensuring that the system meets the necessary standards and functions properly.
In addition to the inspection, sellers must provide buyers with a standard disclosure form that contains all relevant information about the septic system. This disclosure form is designed to provide buyers with comprehensive details about the septic system’s maintenance history, past repairs, and any known issues or concerns. The purpose of this disclosure is to ensure that buyers are well-informed about the septic system’s condition before making a purchasing decision.
Under the new ordinance, sellers are also held responsible for any required repairs unless both parties (seller and buyer) agree to transfer the responsibility during the sales process. This provision ensures that the seller takes appropriate action to address any identified issues with the septic system, either by completing the repairs themselves or by making arrangements with the buyer for the necessary repairs.
By implementing these requirements, the septic system ordinance aims to safeguard the interests of both sellers and buyers. It ensures that buyers have access to crucial information about the septic system’s condition, allowing them to make informed decisions. Simultaneously, it holds sellers accountable for the proper maintenance and disclosure of septic systems, promoting transparency and facilitating a smoother property sale process.
It is important for sellers in Santa Cruz County to be aware of these key requirements to ensure compliance with the new ordinance. By fulfilling these obligations, sellers can not only adhere to the regulations but also contribute to the overall well-being of the community by maintaining the integrity of septic systems within the county.
For a more detailed understanding of the new septic system ordinance, I invite you to watch my video titled “What You Need to Know about the New Septic System Ordinance in Santa Cruz County.”
Latest Market Trends:
As we reach the halfway point of 2023, let’s explore the realtor.com National Housing and Economic Forecast 2023 mid-year update. Mortgage rates have slightly declined, reflecting the drop witnessed in 2022 and continuing into 2023.
Inflation is expected to cool gradually, leading to a decline in mortgage rates, projected to reach around 6% by the end of the year. Although home price growth continues, affordability has become a significant challenge for buyers. Realtor.com has revised its home price forecast, anticipating a decline of 0.6% for the entire year.
Home sales are expected to decrease by 15.8% in 2023, resulting in the lowest annual total sales since 2012. Inventory change forecasts have also been adjusted to a modest decrease of 5% for the year. Despite these challenges, new homes are becoming an attractive option for buyers.
Insights on Mortgage Rates and Home Buying:
In a recent interview, Chief Economist Danielle Hale provided valuable insights into the state of mortgage rates and the future of home shopping. With the Federal Reserve opting to maintain steady rates, but signaling that the tightening phase is not yet complete, there are several factors to consider.
Hale predicts that rate hikes in the near term could put upward pressure on mortgage rates. This means that borrowers might experience slightly higher interest rates in the coming months. However, she emphasizes that this upward trend will likely be temporary. As inflation eases over time, sustainable declines in mortgage rates can be expected.
In early May, mortgage rates remained stable, providing some relief for potential homebuyers. However, in early June, there was an increase in rates, indicating some volatility in the market. These fluctuations highlight the importance of closely monitoring mortgage rates and staying informed about market trends when considering a home purchase.
As the Federal Reserve’s tightening cycle nears its conclusion, Hale anticipates a decline in mortgage rates. This outlook suggests that homebuyers who choose to wait may benefit from more favorable borrowing conditions in the future. However, it’s important to note that market conditions can change rapidly, and timing the market perfectly is challenging.
Given the current landscape of higher rates and economic concerns, Hale advises potential homebuyers to carefully weigh the long-term benefits of homeownership. While higher rates might deter some individuals from entering the market, it’s essential to consider factors such as housing affordability, personal financial goals, and the stability of the real estate market.
Ultimately, the decision of whether to buy a home this year or wait should be based on individual circumstances and long-term planning. Consulting with a trusted financial advisor or mortgage professional can provide additional guidance in navigating the complexities of the real estate market and mortgage rates.
Benefits of Homeownership:
Despite the unique challenges faced in the current market, homeownership continues to offer significant long-term benefits. One of the primary advantages is the potential for substantial appreciation in home value over time. When examining nationwide averages, homeowners who purchased a home three decades ago have witnessed their property’s value nearly triple. This upward trajectory in home values demonstrates the potential for significant wealth accumulation through homeownership.
Furthermore, the housing market crashes that were predicted to occur in late 2022 did not materialize. Contrary to those projections, the housing market has shown resilience and strength, with home prices rebounding in many areas. This recovery has reassured potential homebuyers and reinforced the stability of real estate as a long-term investment.
In addition to the appreciation of home values, the rising trend in rental prices has made homeownership an increasingly financially advantageous option. Rental costs have steadily climbed over the years, making it more cost-effective to invest in a home and build equity rather than continue to rent. This is especially relevant in regions such as Santa Cruz County, known as the most expensive rental market in the United States. In such areas, the financial advantages of homeownership become even more pronounced, as the gap between rental costs and mortgage payments widens.
Beyond the financial benefits, homeownership provides individuals and families with a sense of stability, security, and a place to establish roots. Owning a home offers the freedom to personalize and modify the living space, fostering a sense of ownership and pride. Additionally, homeownership often comes with a range of tax benefits, including deductions for mortgage interest and property taxes, further enhancing its appeal.
However, it’s important to note that homeownership is not without its considerations and responsibilities. The initial costs of purchasing a home, such as down payments, closing costs, and ongoing expenses like property maintenance and insurance, need to be factored into the decision-making process.
Ultimately, the decision to pursue homeownership should be based on a careful evaluation of personal circumstances, financial goals, and market conditions. Consulting with real estate professionals and financial advisors can provide valuable insights and guidance to make an informed decision regarding homeownership.
Santa Cruz Housing Market Update: June 2023:
Let’s dive into the numbers and analyze the Santa Cruz housing market for June 2023. For single-family homes in Santa Cruz County, the sales price to list price ratio increased to 102.2% in June, down from 103.6% in June 2022. The average days on the market decreased to 25 days, down from 34 days in May and up from 18 days in June 2022. The number of active listings for single-family homes in June was 303, and 149 single-family homes were sold with a median sales price of $1,200,000.
For condos and townhomes in Santa Cruz, the sales price to list price ratio increased to 101.9% in June, down from 102% in June 2022. The average days on the market for condos and townhomes decreased to 23 days, down from 42 days in May and up from 12 days in June 2022. The average sales price for condos and townhomes was $782,000.
The Santa Cruz real estate market continues to be dynamic, offering opportunities for both buyers and sellers. Staying informed is crucial for making confident decisions in this ever-changing market.
As your Santa Cruz real estate expert, it’s my passion to guide you through the real estate landscape and help you achieve your goals. Whether you’re buying, selling, or investing, I’m here to provide the knowledge and support you need.
Thank you for joining me in this July 2023 Santa Cruz real estate market update, and I look forward to being your trusted source for all your Santa Cruz real estate needs.
