August Market Report 2022
The sky is not falling. The median price for August 2022 for single-family homes in Santa CruzCounty was $1.3M. This is up slightly from July 2022 ($1.25M) and up slightly from August of2021 ($1.26M). Although these numbers are down quite a bit from the all-time peak valuesfrom March of this year ($1.6M), the current values are in line with the peak value from 2021(May). We are seeing a similar trend in the condo and townhouse market. This makes sensegiven the frenzy of the market at the end of 2021 which rolled right into 2022. Buyers weredetermined to win in multiple offer situations, literally at any cost. These irrational bids pushedthe market to an all-time high that we may not see for some time to come.
Rapidly rising interest rates has had an interesting effect on buyers. On one hand, rising ratesmake the already very high prices, even more unaffordable. On the other hand, many buyershave an urgency to buy now in case rates keep going up. There are also still many cash buyersor buyers with very large down payments that are less affected by higher interest rates.
Although the perceived drop in home values and rise in interest rates has moved some sellersand buyers to the sidelines, there is still a very strong market. If sellers are willing to be“reasonable” in the list price, and take the proper steps to prepare a property, many propertiesare still selling quickly. We are still seeing multiple offers and over bids in many cases, especiallyin the most sought-after locations. If sellers expect to get the prices of the all-time highestcomps from earlier this year, their homes may sit on the market longer.
The market still favors sellers, however buyers are starting to feel some relief. Although theinventory is very low, properties are taking longer to sell and there are not always multipleoffers. We are starting to see more cases of buyers getting offers accepted under list price,especially on properties that have been on the market for a few weeks or more. There are alsomore perceived “good deals” for buyers if they are willing to purchase properties further fromtown, in less desirable locations or if they need a lot of work.
In general, in it is still a good time to sell and there are some good opportunities for buyers aswell. Please contact us to review your situation and evaluate whether or not is a good time forto make a move.
