April 2003 Santa Cruz Real Estate Statistics
Mortgage Rates Remain Low

Although there is uncertainty over the effects of war, low interest rates are expected to keep housing healthy against a sluggish economy, according to the National Association of Realtors®.

David Lereah, NAR's chief economist, said housing, like other sectors of the economy, is not immune to war. "The war in Iraq has caused some economic uncertainty, but the housing industry is better postured to weather negative influences," he said.

Lereah said the war, combined with weak economic growth, will keep interest rates low for the foreseeable future. "With tighter consumer spending, the Federal Reserve will keep the lid on interest rates," he said. "Long-term rates on home loans also will remain low if the inflation rate remains under control. This should continue to stimulate the housing sector and help to provide a solid base for the U.S. economy."

"The rate of home-price appreciation really hasn't slowed yet, but we should see some moderation this year," Lereah said.

Santa Cruz County Real Estate Statistics

Inventory and sales increased in March to start the spring selling season. Home sales were up 25% compared to February but down 10% vs. last March. Condo sales were up an astounding 87% from February and even with last March.

The statistics we use to follow, and anticipate, the market indicate we are in a balanced market.

• The selling price to listing price ratio continues to increase: 96.9%

• Inventory rising entering the Spring selling season, up over last year: 25%

• Days of Inventory fell: 173.9

• Days on market was flat: 84

The following chart shows the Days of Inventory: how many days it would take to sell all the homes for sale at the current rate of sales.

Another important indicator of the Santa Cruz County real estate market is the sales price to listing price ratio. When the ratio is over 100%, homes are, on average, selling for more than the listing price. When that happens, you can be sure we're in a raging sellers' market. In March, the ratio rose to 96.9% for single-family homes and 98.5% for condos.

The following chart shows the SP/LP ratio for single-family homes since January 2000.

The sales chart below shows the historic inventory versus sales ratio since January 1997. Click on the chart to expand it, then click your browser's back button to return.

The chart below tracks the change in median and average prices since January 1998. Click on the chart to expand it.

My advice? Good time to buy. Mortgage rates are the lowest they've been in almost two generations. As always, properties that are priced in line with their condition are selling promptly, and, in some instances

There's your opportunity. You can chase the properties that are priced right for their condition and end up in a bidding war, or you can look at properties that have been on the market for a while and start making offers. Many of the owners of over-priced listings will be getting antsy and if you go in with a good offer, you may be able to buy the property for market price without competition. Many owners will be lowering their asking prices to generate interest. Get in there before they do.

For sellers, pricing, as always, is the key. If you price your property in-line with the market and the property's condition, you'll sell your home faster and for more money because you'll be getting multiple offers. Overprice it and you're just wasting your time. The following chart comes from Marin County. It shows March home sales plotted by the sales price to listing price ratio vs. days on market. You can see that the longer a home is on the market, the lower the pricing ratio is.

If I can help you devise a strategy, call me at 831.588.1472 or email me at graham@santacruz-realestate.com.

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