SLV Homes: Spring Forward
By M.C. Dwyer
Traditionally, just like tulip trees and daffodils, the real estate market bursts into new life in the spring. This year, like everything else defying normalcy, it felt like the market barely took a nap after the winter holidays. People’s migration out of cities and into the countryside continues, as the ability to work from home spawns an influx of new buyers into our small communities. Merely weeks ago, 30-year fixed mortgage rates had fallen as low as 2.75%, further whetting home buyers’ appetites. And the nesting urge arose among our fellow fire survivors as the realities and uncertainties of rebuilding rustled their feathers. Like the roots of our redwoods, their desire to stay shows how deeply intertwined our roots grow. This trio of forces created a whirlwind of buyers trying to win the very few homes listed for sale here.
Changes in Mortgage Rates
As signs of a recovering US economy grew, rumors of inflation frightened the securities markets, particularly fixed income. Assurances from the Federal Reserve that they would hold interest rates steady to promote economic growth only made the situation worse. As bond yields rose, mortgage rates followed, rising precipitously from 2.75% up to nearly 3.5%. That’s a 0.75% increase in rates, within about six weeks, which created a sense of urgency for buyers to lock in the lowest mortgage rate they could.
Create Housing Impacts
For the average home buyer, this confluence of forces makes buying a home even more difficult. Like musical chairs, there simply aren’t enough homes for all the buyers. Most homes get multiple offers, unless priced too high. As a result, prices are rising dramatically.
Through late March, the San Lorenzo Valley average home price rose to $746,000, with a brisk pace of 70 sales and an average time on the market of a month — sometimes a few days to a week. While the average sale price was only $10,000 over asking, many SLV homes sold for $50,000, $100,000, and as much as $200,000 over asking price. (Last year, just 52 SLV homes sold in the same time frame, taking an average or 73 days to sell for a median price of $634,000 — about $6,000 under asking price.)
The old adage sellers used to say, that while they could always lower their price, they couldn’t raise their price, now has a glaring flaw: today’s buyers are so tuned in to property values, they often won’t even make an offer on a property that is priced too high, not wanting to “insult” the seller. On the other hand, properties that are priced fairly on day 1 often garner so much interest that they get multiple offers, driving the price up.
Our Rebuilding Journey Continues
Phase two of my husband’s property is nearly complete. While waiting for soil testing, we’re working with a design and engineering team to finalize building plans. It was truly impressive to witness the effectiveness of the heavy equipment operators and dump trucks clearing the land, though the driveway suffered extensive damage. To accept the free county cleanup option (his insurance wouldn’t cover it), he had to waive their liability, so that cost is painful. The County has hired Four Leaf to facilitate the fire survivor permit process. Although Four Leaf told me that the right to an expedited rebuilding process stays with the land, they have told others the opposite.
The new sprouts on redwoods make them look like giant green pipe cleaners, but many oaks, madrones, and firs are dead. Still, I feel a sense of cleansing and renewal. The tenant’s classic VW bus was left as we’d wished, but the metal gazebo marked “keep” on our map was hauled away. At least the workers left the small pile of recovered treasures for the tenants.
M.C.Dwyer, MBA, REALTOR® CA DRE License 01468388
From the redwood-covered slopes of the Santa Cruz Mountains, through lush San Lorenzo Valley and the wind-tossed waves of the Pacific, lie villages and small towns where life moves at a slower, richer pace and the views are simply breathtaking. If you’re interested in San Lorenzo Valley homes and Santa Cruz Mountains real estate, you’re in the right place to get started. mc@mcdwyer.com
Photo by M.C. Dwyer
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