June 2003 Santa Cruz Real Estate Statistics
Home Sales to Set New Record

WASHINGTON (June 3, 2003) - Stronger-than-expected home sales activity so far this year, combined with a continued drop in mortgage interest rates, means the housing sector is likely to set a sales record in 2003, according to the National Association of Realtors^®.

David Lereah, NAR's chief economist, said the forecast has been steadily upgraded all year. "The performance of the current housing market is nothing short of astounding," he said. "Record low mortgage interest rates, a growing number of households, rising consumer confidence and an improving economy mean we probably will set a third consecutive record for both existing- and new-home sales this year."

"The 30-year fixed mortgage interest rate should remain historically low and edge up only slightly to about 5.7 percent in the fourth quarter, stimulating both home sales and refinance activity - both should contribute to overall economic growth in 2003," Lereah said.

Santa Cruz County Real Estate Statistics

While the country as a whole may see a new sales record set this year, Santa Cruz County will not. Although sales are increasing as we enter summer, they lag behind every year since 1997 except for 2001.

Inventory and sales continued to increase in May with home sales going over 200 units for only the second time since last August. Home sales were up 9.7% compared to April but down 25.6% vs. last May. Condo sales were up 34% from April while gaining 22% over last May.

Days of Inventory continues to drop, which is good for sellers, but the Sales Price to List Price ratio also dropped, which means sellers are willing to make deals.

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.

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 is the same as last month. For buyers, inventory is good right now and there’s no need to get caught up in a bidding war. There will be another home. You still need to be prepared to buy. That means get your financing in order and always bring your check book with you.

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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