Santa Cruz Real Estate Market Update: June 2022

Описание: Summer is here and things are certainly heating up, outside at least, but let's look at the housing market. Are we in a housing bubble? Looking at the history of the housing market, we are not in a place where the market is ready to burst. And we are going to break that down for you, right here right now.

if we take a look at the history of the modern housing market looking specifically at prices, we see that there was only ever one significant fall in home values in 2008. There are two major reasons for this. Loose lending standards and cashout refinances. People could apply for a loan they did not truly qualify for, then take cash out of their homes to finance a lifestyle that they didn't qualify for either. But will we see something similar today?

As Danielle Hale from realtor.com says, "We have learned from history that prices can fall. The more important question is if it's going to happen right now. And that's hard to say."

The last two years have been unprecedented and have led us here. There are two things that set today's market apart from 2008, however. Let's first look at risk. Product risk and borrower risk. The type of loans that caused these risk issues in 2008 are no longer in existence. This has also led to our second factor to look at, which is foreclosure. Foreclosure in the U.S. is at an all time low. We can also attribute much of this to those strict lending standards.

With more qualified buyers, this should lead to a lower chance of having to foreclose, but what about rising home costs? More expensive homes and higher interest rates must make it hard to find really qualified buyers. According to the federal reserve, this actually is not the case. While it has risen recently, the ratio of mortgage to disposable income shows that we have seen much worse.

Many people are asking, "Should I wait for a downturn in the market?" Let's take a deeper look to better understand the ever-changing market. Here is what the experts are saying about the home prices and how they will appreciate. Fannie Mae gives the highest percentage at 10.8% with Freddie Mac close behind at 10.4%. Zelman and National Association of Realtors are giving similar feedback, but Mortgage Brokers Association is coming in much lower than the rest at 6.2% appreciation. This all averages out to be 9% in home price appreciation in 2022.

So, what does this mean? How does this affect the housing market?

I recently had the pleasure of listening to Dr. Elliot Eisenberg. His predictions of the market that there is likely to be a recession, but a recession unlike any other in 2023. Why unlike any other? Because we are still in such a deficit in inventory. Creeping from one month to one and a half months of inventory, but a stable housing market has six months of inventory, which means in this market, to sell all that is available, it would take only 1.5 months. So despite the rate increase, we are still in a seller's market. That said, with the prediction of a recession in 2023, we are imagining that the appreciation of pricing will slow, but we will not see a housing market crash.

Now for the local Santa Cruz County housing market analysis. Santa Cruz County median single family home costs 1,312,500 and sold in nine days for 109% of the list price based on 156 sales in May of 2022.

In Santa Cruz County, the median residential common interest home costs 852,500 and sold in six days for 110% of the list price based on 28 sales in May of 2022.

If you have any questions on how the current Santa Cruz real estate market could affect you and your real estate dreams and goals, please reach out for a complimentary, confidential consultation. I'm Shemeika Fox, you Santa Cruz real estate expert. And as always, I'm here to help. Make it a great day.

Shemeika Fox: Your Santa Cruz County Real Estate Expert. My passion for helping people achieve their Santa Cruz Real Estate dreams is complimented by my strong work ethic. Our focus is to help you sell your Santa Cruz County California property faster and for more money… and to help you find and buy the perfect home with little hassle.

Shemeika Fox
Santa Cruz Realtor
eXp Realty of California Inc.
Fox Realty Group Inc.
831.588.2334
[email protected]
https://www.yoursantacruzrealestate.com/
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