2010 Housing Update
By Datta Khalsa, Broker

While many people were busy complaining about the economy in 2009, an interesting thing happened to the Santa Cruz County Real Estate housing market:

It improved. Dramatically.

Housing prices and activity countywide show several trends that point to a resoundingly strong market developing for the long-suffering Sellers of our county.

From January to December 2009, the Median Price went from $437,500 to $555,000, and the Average went from $528,190 to $603,027. This represents increases of 26.8% and 14.2%, depending on which index you like to track.

During the same period, the Unsold Inventory Index, which compares the Number of Sales to the Number of Listings, steadily dropped over the course of the year from a full 12.0 month supply in January to a shockingly robust 4.4 month supply in December. This is a remarkable improvement over the previous year, and is, in fact the lowest the index has been since September 2005.

Historically, low Unsold Inventory Index levels create an upward pressure on prices as buyers compete for a dwindling supply. Coupled with widespread belief by consumers that the market may have reached its bottom, along with strong rumors of increasing interest rates in the spring, we are seeing unprecedented activity in the local market that has many of us working long hours like we haven’t seen since the boom years of 2002-2006.

Speaking from my own experience, this upsurge has been pretty much across the board, with offers coming in at an amazing rate of sometimes 2-3 per day on a broad range of my listings:

In the first 2 weeks of this year, offers, including multiple offers, have come in on many of my listings. And the activity has been across the board:

• $120,000 mobile home in Seacliff (now pending);
• $485,000 home in Seacliff (now pending);
• $529,000 home in Corralitos (now pending);
• $699,000 home in Aptos (offer in progress);
• $1,250,000 oceanfront home in Seacliff (offer in progress); and
• $675,000 acreage in Lompico (offer in progress).

In all, OVER HALF OF MY RESIDENTIAL AND LAND LISTINGS have either gone into escrow are currently in negotiations to go into escrow, and open houses have become a flurry of activity with as many as 40 visitors per day in recent weeks. And I’m not alone: most of the seasoned agents I speak with across town are reporting a similar state of overwhelm with the current level of work coming in.

The upshot? After a rough couple of years, things are finally looking good again for the local housing market.

Datta Khalsa is the Broker and Owner of Main Street Realtors in Soquel.  He can be reached at (831)818-0181 or datta@mainstrealtors.com