SLV Home Sales in an Evolving Market
By M.C. Dwyer
The California Association of REALTORS® just presented their 2022 economic outlook, expecting home prices to appreciate around 5%. It’s possible California peaked in August 2021 with a median home price of $830,000. 20% of homes for sale in SLV & SV have dropped their asking prices – but 80% of those price reductions occurred on homes in the $975,000+ range. Meanwhile, the percent of home price sales over asking price fell to about 60% Countywide in the last month (from about 70% in June). In the chart below, the number of home sales declined across the state, as more homeowners choose not to move. Normally (last seen in 2019), there are about 4-5 months of housing inventory, but now it’s the lowest ever recorded – just 1.4 months – which may prevent prices from dropping.
Mortgage rates directly affect the cost of buying a home. Each 0.5% rise in mortgage rates costs about $183 more per month for a median price home. Last February, 30-year fixed-rate mortgages averaged under 3%, and home buyers were anxious to buy a home and lock in the lowest rates in a generation. This year, the Federal Reserve said they’ll tackle inflation – the highest since the 1980s – by increasing their bank lending rates as many as three times, depending on the US economy (in the past, the Fed often increased rates by 0.25% at a time). Mortgage rates rose quickly: averaging 3.7% now. For perspective: In the 1990s, anything below 8% was considered affordable. The highest rates ever recorded were in 1981: 18.5%!
As mortgage rates rise, overall housing affordability falls, unless home prices fall enough to offset higher rates.
| State/Region/County | Median Price December ‘21 | Year over Year % price change | Year over Year # of Sales Change | Median Price December ‘20 | Median Price December ‘19 |
| CA Single Family Homes | $796,570 | 11% | -15.7% | $717,930 | $614,880 |
| Santa Cruz County SFH | $1,200,450 | 12.2% | -23.5% | $1,070,000 | $889,000 |
| S.F. Bay Area SFH | $1,200,000 | 13.4% | -23.1% | $1,058,000 | $908,750 |
As we enter February, there are only 20 homes listed for sale in the San Lorenzo Valley – identical to this time last year. Prices range from $4 million for two homes (about 2,200 square feet) on over 200 acres in a remote part of Felton, to a 2-bedroom 664 square foot fixer-upper in Boulder Creek for $495,000. Scotts Valley only has 11 homes for sale (compared to 23 this time last year) ranging from $2.875 million for a 4-bedroom 2-bath 4300 square foot home on 1/2 acre, to a 2-bed, 2-bath 1000 square foot condo priced at $570,000.
Lots for sale in the San Lorenzo Valley mushroomed from 37 last year to 59 at the beginning of this year. Many of these lots had homes on them before the CZU fire. Prices range from $1.295 million for 10 acres (unaffected by fire) in Boulder Creek to $10,000 for ¼ acre, likely an inaccessible lot in “Happy Land” Lompico/Zayante. Scotts Valley has just five lots for sale now (versus 12 last year) ranging from $760,000 for about eight acres to $88,000 for 1.5 acres near Highway 17.
Five commercial/agricultural properties and business opportunities are listed on the MLS in the San Lorenzo Valley versus eight last year. Four parcels totaling over 50 acres off a gravel road between Boulder Creek and Los Gatos is going for 1.1 million. The former Mountain Store in Boulder Creek – fixtures and a home – is on the market for $995,000. A buildable lot in downtown Boulder Creek is $285,000. And the Taqueria in Boulder Creek (business only) is listed for $165,000. There’s an office rental in Felton for $1,295/mo, and Scotts Valley has just one business for sale: a restaurant for $299,000.
Our Rebuild
Last February I wrote, “Those who choose rebuilding are tackling an unimaginable array of hurdles and details.” We never could have guessed we’d wait until December 2021 just to get permits for a new power pole and temporary housing/RV spot. The engineering and design team we hired has fallen farther and farther behind. Although we asked them to put our project on hold last spring until we got fire clearance (in July), we are disheartened by their decision to take on and complete new clients’ projects ahead of ours, despite knowing my husband’s insurance benefits ended in August. Last we heard, they were finishing our project mid-December; there’s no new timeline available. Unfortunately, everyone – from geologist to architect, contractor to engineer – is now booked out months in advance, or, not taking on new clients. If anyone you know lost their home, give them some chocolate for Valentine’s Day and tell them you appreciate them.
“M.C.” (MaryCatherine) Dwyer, MBA, REALTOR®
C: (831) 419-9759
E: mcd@mcdwyer.com
W: www.mcdwyer.com
CA DRE License 01468388 with eXp Realty
Sources: California Association of REALTORs, Reuters, REALTOR.com, Mercury News, Mortgage Bankers Association. The statements and opinions contained in this article are solely those of the individual author 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: Heart stone path designed by one of MC’s clients. Photo by MC Dwyer
