Santa Cruz Real Estate Market Update | September 2021
Are we in a housing bubble right now? Is my Santa Cruz home going to lose value in the future? Don’t be misinformed. Many times, people react based off of emotion due to lack of information, and I’m here to help make sure that does not happen. I’m Shemeika Fox, your Santa Cruz real estate expert, here to give you the latest information during this fall season. We are still noticing an accelerating percentage of appreciation growth accumulate over time as the year continues.
The State of the Nation’s Housing 2021 at Harvard University says that “These outsized increases have raised concerns that a home price bubble is emerging. However, conditions today are quite different than in the early 2000s, particularly in terms of credit availability.” The current climb in Santa Cruz home prices instead reflect strong demand and amid tight supply, helped along by record low interest rates. Today we are nowhere near where we were in the last housing bubble in terms of credit availability. Santa Cruz homes are also actually more affordable today than they were during the last housing bubble. All in all, we are not in a housing bubble, and what we are experiencing currently, in Santa Cruz County, is a supply and demand issue.
Sam Khater, the economic and housing research Vice President and Chief says “The main driver of housing shortfall has been the long-term decline in the construction of single-family homes.” Completed single-family housing has been below the average over the last 13 years consecutively since the 70’s. As the population grows, we don’t have enough homes to keep up, which has spiked the rise in prices. Forecasters are saying as interest and prices rise, we just start to slow the rate of appreciation as the year moves forward.
Home inventory numbers dropped from July in all five MLS listing counties except for Monterrey, which showed just a 3% improvement. Inventories are still down across the board compared to a year ago. Median days on market, or DOM, grew from 10 to 11 in Santa Cruz and San Benito counties, but were unchanged in Monterey, San Mateo, and Santa Clara counties, Median sales prices rose only in Santa Cruz County.
Compared to July, median prices were down 8% in San Mateo and 1% in both Monterrey and San Benito counties. Unchanged in Santa Clara County viewed year over year. While down 1% in Monterey County, median sales prices rose in the other four counties ranging from 3% in San Mateo County to 24% in San Benito County.
Every county saw sale prices above list prices on average, while there was a 1% decline in the premium paid in San Benito, San Mateo, and Santa Cruz counties. The percent of list price paid in August was still 101%, 109%, and 104% respectively in those counties. Percent of list price received also showed premiums in Monterey, 102%, in Santa Clara, 109.
August closed sales fell in Santa Clara and San Mateo counties compared to July, but increased in Monterey, San Benito, and Santa Cruz counties. When comparing August 2021 to 2020, sales increased in Santa Clara, 14%, San Mateo, 14%, and Santa Cruz, 42%, but dropped in Monterey, 8%, and San Benito, 1%.
And here are the latest housing numbers for Santa Cruz for September 2021. In Santa Cruz County, The median single-family home cost $1,255,000 and sold in 11 days for 104% of the list price based on 217 sales. Inventory decreased by 8% from July and down 9% from August 2020 with 316 homes available compared to 347 homes last year. Average days on market increased by four days from 18 to 9 days or 27%. Median days on market increased by one day from the month before. The number of new listings from the month of August decreased 18% over July, but is up 36% from August of last year. Closed sales increased by 15% from July, from 188 to 217 homes sold. This is up by 42% from August of 2020.
In Santa Cruz County, the median residential common-interest home cost 775,000 and sold in 11 days for 104% of the list price based on 42 sales in August 2021. Inventory increased 8% from July, but is down 34% from August 2020 with 69 homes available compared to 104 homes last year. Average days on market increased by 12 days from 12 to 24, or 100%. Median days on market went up three days from the month before. Number of new listings for the month of August decreased 13% over July, and is up 15% from August of last year. Closed sales decreased 11% from July from 47 to 42 and is down 18% from August 2020.
I’m Shemeika Fox, your Santa Cruz real estate expert. And I hope you enjoyed the September 2021 market update. As always, if you would like to discuss the real estate market, selling your Santa Cruz home or buying a home in Santa Cruz, reach out for a confidential, complimentary consultation, I am here to help and would love to hear from you.
