This Real Estate Market for the new year, I am going to tell you a little bit about where we've been, where we're going and a little bit about where we are. Happy New Year! For Santa Cruz County in 2022, we had about 1480 sales. The average sale price was $1.47 million, appreciation was 10.2% for 2022. For people who were worried about buying and paying too much because prices were going down last year, you have absolutely no worries. And I think overall you really shouldn't worry. I think your property is going to appreciate just fine. 43 year average appreciation is 8%. Taking record of this, started in 1979, do you know the average sales price in Santa Cruz County was $74,998! Video below and podcast is bottom right hand corner.
Can you even imagine? The average appreciation over all of these decades of going up and down 8%, that's pretty good. If you spoke to an investor and you said you had an investment strategy, but you didn't name the product that you were investing in and you said 8%, I bet they'd think that was okay. Remember, if it's your first home, it's your home that houses you, don't worry about value too much. Just live in it and enjoy.
Where we're at right now:
You see December finishing up the fall season where buyers and sellers race to the holidays to get their real estate finished.
If you follow Santa Cruz, you've seen the news and you understand that we've had some storms and we've had, a disaster. Now I've never lived in any of the areas that were extremely impacted by our disasters. But growing up in a community that seems to always just kind of be recuperating from the last disaster. We only got downtown kind of straightened out in the last couple years and it's been almost 33 years. I think that we're always going to be an area of rebuilding.
But what is the market going to do? It's going to be a lot like last year. It's going to be a rollercoaster. It's going to start kind of slow. Chugging up the rollercoaster hill. There's going to be a few great listings that are going to pop on. They're going to have multiple offers because those buyers have been waiting.
The buyers have their financial ducks in a row, they've been watching the interest rates climb and now they've seen them come down a little bit. The interest rates are easing and they're ready, they're prepared. They have their lending together looked at disclosures. They understand how to read disclosures. They we're going to go down the hill super fast like we normally do every spring. Why? Because we don't have enough inventory for the people who are interested in living here. Then normally right at the end of spring coming into summer, graduations in school, we will hit the turn and we will slow down a little bit. But maybe not as much as in past years. I think we're actually going to stay a little busier through mid-summer and then it won't hit till slow till August. Because interest rates are supposed to go down even further in May and June.
Normally the market slows because of the way the population shifts and how they do things. Vacations, graduations, summer activities do slow the market in the late spring, early summer.
Why is inventory so low? Well, unfortunately it could still be on the back of the disasters. We still have people renting from the fires who can't rebuild their houses in Bonny Doon in some of the outlying areas. They do have their insurance payments so they can pay those rents and they can kind of scoop up what might be for sale inventory where sellers are just like, Hey, you know this, this tenant can pay me what I would like and I'll just hang onto it for a little bit longer.
And those payments that those tenants are making are probably going to be more than your mortgage payment would be if you were buying. There are renters that are going to be leaping into the market because they want to get in at a lower monthly cost. There are those people and then we have people from the floods, and they are going to be renting, they're going to have their insurance settlement or their disaster fund relief, that will come into the market as renters or homeowners putting more pressure on the market too. They do crowd it out a little bit for people who want to buy because again, those sellers will delay selling.
I might just rent it instead of selling it. The seller is not getting their price in terms of an offer, and they can get a good price if they rent it. So keep that in mind when you're buying. It's not just a wide open market because the interest rates go up. It's not the doom and gloom that you'll see a lot on the national news. Lately I saw an article that said the market might be shifting. And that's a really easy prediction to make. Why? Because interest rates are already starting to ease. There's talk of them coming under six. Rocket Mortgage told one of my buyers that they could get under 6%. Now that's going to make a translation into the market of either a higher price than we've seen before, or a flat price, which is what we saw for 2022.
For 2022 we saw the pricing just kind of stay flat in the latter half of they year. It didn't really go up. There wasn't lots of multiple offers. But we didn't see prices go down a whole lot. I predict that spring is going to be just as busy as ever. You'll see me use rollercoaster graphics in my videos only because I want people to know it could be a little bit of a wild and maybe even bumpy ride as we probably see the rates go down. A lot of people jump in, mortgage applications are already up this week and then, you know, we might hit a bit of a uptick in rates and it, it'll kind of cause a bit of a slowdown and then it'll just kind of go right back. I predict it's going to be like a normal spring for a great property and a really great location.
It's going to be super busy sellers, don't worry, you can still get the price that you want to get and buyers, you still need to be prepared. My overall prediction is it's going to be a lot like past years. It’s going to be very busy for buyers and for sellers. I recommend following me on Twitter, I retweet Santa Cruz information, restaurants, city and county information about traffic, transportation, anything that I see that might be of interest as you're looking into buying here or you live here. Follow me on Instagram for videos and pictures of Santa Cruz of just how much I love a lot of the views I have here locally. And then of course subscribe to my YouTube channel.
Posted by Michele Replogle on
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