May 2003 Santa Cruz Real Estate Statistics
Home Sales on Track for Second Best Year

A firming economy and a continuation of historically low mortgage interest rates mean 2003 is likely to be the second-best year on record for the housing market, 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.

David Lereah, NAR's chief economist, said home sales are at a sustainable pace. "With most of the disruptions of unusual weather and war behind us, home sales should be fairly stable going forward," he said. "The current level of activity is on track with our forecast, which would make this the second-best year ever for home sales."

Lereah said the 30-year fixed mortgage interest rate should move only gradually and rise slowly to 6.3 percent by the end of the year. "This will pinch some buyers at the margins of qualifying for a loan, but will not significantly impact the overall market. We also expect the economy to gain momentum in the second half of the year, brightening the job market and boosting consumer confidence," Lereah said.

Santa Cruz County Real Estate Statistics

Inventory and sales continued to increase in April. Home sales were up 14% compared to March but down 11% vs. last April. Condo sales were down 11% from March while gaining 14% over last April.

Prices continue to increase with the median single-family home price hitting a new record: $541,000. The average home price wasn't far off soaring to $631,741. This is the first time the average price has been over $600,000 since July 2001.

The median condo prices also set a new record at $392,000 while the average condo sold for $389,482.

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? 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.

For sellers, pricing, as always, is the key. If you price your property in-line with the market and the properties condition, you'll sell your home faster and for more money. Overprice it and you're just wasting your time.

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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