Santa Cruz Real Estate Market Update: June 2021
The lack of inventory is one of the major reasons the housing market continues to go up. Is this problem going away soon? Are we going to continue to see housing prices go up? Hi, I’m Shemeika Fox, your Santa Cruz real estate expert.
And, well, there are a few issues we need to address. One is the lack of single-family housing units completed by decade. In fact, new inventory is significantly lower than it has been in the past four decades. The new home builds is almost half of what it was the previous decade. So, from 2009 to 2019, new home housing units was 12.6 million and from 2010 to 2019, only 6.5 million homes have been built, which means we have almost half of the supply of new homes being built. And this is one of the causes of Santa Cruz housing prices increasing. When you have a lack of supply of inventory, which is what we are seeing across the nation right now, it causes bidding wars and drives up the housing prices.
So, this brings up another good question.
With the rise in home prices, is the market going to crash? In fact, Google recently reported that the search question, “when is the housing market going to crash” spiked 2,450%. If you look at the cost of goods right now, lumber prices have tripled, which means the cost to build a new home is going to go up significantly. With the cost of building a home increasing, it may mean the home builders and developers will be less likely to build new homes, which will continue to hurt our supply and demand and drive housing prices up even more. So, is the housing market going to crash in Santa Cruz? I don’t have a crystal ball. Sometimes, I wish I did, but mostly I wish I didn’t.
But understanding the facts in this Santa Cruz housing market, video is one of the ways to help you understand some of the reasons the Santa Cruz housing market is the way that it is right now.
Currently, the Santa Cruz housing market is increasing. The median price for a single-family home in Santa Cruz is up to $1.3 million. This is a 3.4% increase just from April to May. And third straight month of increase in Santa Cruz housing prices. Santa Cruz County condos and town homes’ median sales price has increased 13% from April to May with a median sales price for Santa Cruz County condos and townhouses of $802,500. Total number of active Santa Cruz listings in June was 467. The beginning of June brought on 81 new Santa Cruz home listings, which is down from both 2019 and 2020 .
As Lawrence Yun, Chief Economist of the National Association of Realtors, said, “This is not a bubble. It’s simply a lack of supply.” So, are housing prices going to keep going up? What are the experts saying about the forecast for the second quarter of the year?
Forecast from Fannie Mae, Freddie Mac and the Mortgage Bankers Association and other experts, all project an average of 6.8% appreciation this year and expect that to continue on through 2022. Forecasters are also projecting that we are going to sell more homes this year than we sold last year. Last year, according to them, we sold 6.7 million homes. And this year we are projected to sell 7.5 million homes.
I know it can be scary after what happened in the 2008 housing crash to know what to do. Should I sell now and capitalize on these high Santa Cruz home prices? Should I buy a Santa Cruz home right now and participate in potentially a bidding war as prices are being driven up so high? These are big questions and each situation is so individualized in order to really dive deep and help you determine if now is the right time for you to sell your Santa Cruz home or buy a Santa Cruz home.
Please reach out to me for a confidential complimentary consultation. I’m Shemeika Fox, your Santa Cruz real estate expert. And as always, I’m here to help. santa cruz real estate, santa cruz real estate,