Summer Housing Market Update
By MC Dwyer
Consumer sentiment recently improved on two fronts: about 80% of consumers expressed improved job security while 66% feel it’s a good time to sell, but only 25% thought mortgage rates would decrease. After reaching a peak of 7.8% in October of ’23, 30 year fixed mortgage rates have settled into a range between 6.75% and 7.25%, rising and falling on economic news, stock & bond market direction and geopolitical uncertainties. Recently, sentiment at the Federal Reserve has improved as inflation looks calmer, with recent comments pointing toward the first rate cut in this cycle possibly in September. Financial advisors say refinancing starts to make sense when rates drop about ½% below the current mortgage. Mortgage specialists advise to lock in your rate on a home purchase offer as soon as you and your lender agree the rate benefits your budget. Considering only mortgage interest and principal payments on about a $500,000 loan, each 1 percent change in rates translates to approximately a 10% change in payments.
While insurance companies are working to negotiate higher rates with the California Insurance Commissioner as a condition of re-entering the market, Cal Fair Plan remains essentially the only option available for home purchases on the inland side of Highway 1. Existing policy holders who don’t get dropped by the likes of State Farm and Farmers are shocked as their renewal rates are often 25% – 50% higher than what they used to pay. The necessity of using the Cal Fair Plan seems to be contributing to a slow-down in sales, since property prices haven’t fallen enough to offset increased insurance rates.
For a few months now, I’ve reported the number of new homes coming on the market is often double the number of homes that sold. Inevitably, the inventory of homes for sale is growing here in the San Lorenzo Valley, California, & across the Country. Nationally, the number of listings available is about 37% higher than last year. While US home prices are still about 4.5-5% higher than last year, prices are cooling in tandem with demand, which is down about 15% compared to last year. Homes are on the market longer before getting an offer, as buyers face less competition. We recommend our clients focus on preparing their properties for sale: getting inspections, making repairs, and staging, all to make it easier for buyers. This summer we’re advising clients that pricing a little lower than their competition positions their property as the obviously best deal in their price/amenities tier, since buyers have many homes to choose from. Redfin indicates that the segment that’s performing best is move-in-ready homes with large yards in the better school districts.
California Association of REALTORS® reports June Santa Cruz County home sales prices rose about 3% year over year while sales remain 25% lower than last year.
Chart: Average residential sales prices from August 2023 to July 2024 in the San Lorenzo Valley.
Riverside Home in Boulder Creek
This riverside sanctuary at the end of the road is encircled by manicured gardens on just under half an acre. Past the gate, the river splashes by while a trio of redwoods stands sentry. The home was rebuilt and expanded in the 1980s using redwood harvested from the property. A stone pathway beckons you inside, where the main level has two bedrooms, open living and dining area, and the kitchen beyond. There’s a riverside deck ideal for relaxing and dining al fresco in our idyllic climate. Picture windows and skylights illuminate the home, blending it with the forest. Three rooms downstairs are accessible via interior stairs and a separate entrance making it great for multigenerational living, working, creative or workout space.
Kitchen windows frame views of the river, firepit and forest. Quartz counters, quality appliances and a generous pantry round out a chef’s dream. The new expanded primary suite features a sitting area, walk in closet, and large en-suite bath. Airy vaulted ceilings and bamboo flooring offset a stone wall behind the wood stove. Great workshop, storage shed, and metal carport. This friendly tight-knit neighborhood shares a private park and swimming hole. About 10 minutes drive to downtown Boulder Creek. Imagine entertaining with oodles of parking, or simply living immersed in nature’s tranquility. Contact me for more information.
Send your questions & topic requests to “M.C.” (MaryCatherine) Dwyer, MBA, REALTOR® mcd@mcdwyer.com
CA DRE License 01468388 EXP Realty of California, Inc.
Data Sources: California Association of REALTORs, CNBC, CNN, Forbes, Fox, MLS Mercury News, Mortgage News Daily, National Association of REALTORs, Redfin, Reuters and Zillow, all as of 7/19/2024,
The statements and opinions contained in this article are solely those of the individual author and her sources, and do not necessarily reflect the positions or opinions of eXp Realty, LLC, or its subsidiaries or affiliates (the “Company”). The Company does not assume any responsibility for, nor does it warrant the accuracy, completeness or quality of the information provided.
Featured photo: Riverside setting 10 minutes from downtown Boulder Creek with plenty of amenities. | Isaiah Ketterman at Maven X Visuals
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