Market Conditions at the Ocean; Santa Cruz Weathers the Storm

July 15th, 2009
 
We continue to see healthy activity in the Santa Cruz housing market.  The City of Santa Cruz currently has 55 pending sales and 98 active listings.  This ratio is consistent with a balanced market.  Scotts Valley is showing 33 pending sales and 81 active listings. Though we are seeing multiple offers for well-priced and well-located homes, properties are generally not receiving offers significantly over asking.  In some cases appraisals have served to adjust prices lower.
It is important to note that sellers are working with buyers to deliver their homes in good condition and to adjust pricing according to appraised value, when necessary.  We are seeing a more civil market.  Buyers want to negotiate, and sellers are considering most every offer.  Homes are coming on the market at asking prices that are more in line with market conditions.  These homes are selling within 2% of asking price. In most cases, there has been back and forth negotiation, and three to four counter offers is not unusual.
Buyers are enthusiastic.  Interest rates are low, and market depreciation has brought prices into a range that allows for monthly payments to fit into household budgets.  The buyers are carefully analyzing the percentage of income that will go to Principle, Interest, Taxes&Insurance.  They are factoring in maintenance cost (and Homeowners Dues, when applicable) and adding those numbers as part of their total costs.  This more conservative approach to buying would seem to indicate that we will experience fewer foreclosures in the coming years.
I'm positive about the housing market.  I do understand that we are going to continue to see many foreclosures and bank owned homes coming on the market. I do believe that this new supply will serve to allow people into the homes that were previously too expensive, and this supply will also open the market up for people who have been reluctant to move forward because of bad news about the economy.