February 2008 Santa Cruz Real Estate Sales
March 14, 2008
Oy vey. Ooof. What’s a good thing to say when you’ve just managed to crawl out from under a ton of bricks that got dropped on your head? I have been slammed. Slammed, I tell you! But you probably won’t find that nearly as interesting as I do. A lot’s been happening…
Like what’s up with that Eliot Spitzer guy, anyway? There’s a guy you think would know better. You’d think. It just goes to show, the world is just full of surprises.
One thing that’s going to come as a surprise to some folks is the February real estate sales data here in Santa Cruz county. The bottom line? Business is up. That’s good news, but if you think about it, you’d realize it couldn’t actually get much worse, and even with this improvement, we’re really just kind of skipping along the bottom. If you don’t already, I invite you to subscribe to my Santa Cruz real estate newsletter, which comes out once a month, or just cruise over to my page of Santa Cruz Real Estate Market Data, which is updated monthly.
In case you’re too lazy to do either, let me summarize it into a tasty new chunklet: Santa Cruz County home sales rose 9.1% in February, woo hoo! That’s compared to January, of course. Year over year, home sales are off 46.7% from February of 2006. And, of course, I don’t have the hard data handy to back this up, but I’m going to go out on a limb and say that I’d bet most Februarys have at least 9.1% more sales than the Januarys that precede them. So although this 9.1% sales increase is good news, mostly it’s good because if it were a decrease, that would have spelled some serious trouble.
That 9.1% is the sales volume - that is, the number of units (single-family residences - yes, your home is just a unit, like a Big Mac or a jar of Ponds Cold Cream) sold was 9.1% higher in February than in January. But if you already own a home, you may be more interested in knowing about home prices- is your home worth more, or less? Good news, good news - median home prices rose a rockin’ 11.9% from January! But don’t pop the champagne corks quite yet - prices are down, county-wide, 5.2% from February 2006.
Of course, all markets are local, so it doesn’t do a whole lot of good, really, to look at the county as a whole. But we’re Americans (a lot of us, anyway), and we like those tasty news chunklets, so probably you’d be satisfied with just knowing that one glib statistic. But if you demand more - if you are, say, a reader of The Economist - you might want to know, say, how Soquel is doing? The median price in Soquel is up a whopping 4.2%! Whereas if you’re in Watsonville, alas, the median price is down 28.7% from February in 2006. But that’s good, the rate of decline is slowing there - it was down about 40% for all of 2007.
I hope to get back to a more regular update schedule here on the blog - I need to learn to walk around the dangling net with the ton of bricks snared inside. Note to self.
Posted by SantaCruzBroker at 11:26am
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Watsonville Foreclosures Meet the Press
March 03, 2008
Hey, I’m famous! Kind of. On the eve of our tour down to Watsonville to look at some REO foreclosure opportunities, I got a call from one of the staff writers for the Register Pajaronian. He asked if he could come along on the foreclosure tour. I said sure, no problem…
[From the Register Pajaronian - Foreclosed homes lure investors to local tour ]
Members of the Santa Cruz Real Estate Investment Club took a whirlwind tour Saturday through Watsonville, looking at six properties placed on the market as a result of foreclosure.
OK, so it’s not Sixty Minutes. But everyone has to start somewhere. The reporter from the RP (David Carkhuff) was very nice guy, visited a couple of houses with us, took some photos, and went on his way.
The Foreclosure Tour itself was pretty fun, and the folks who came along seemed kind of surprised at how cheap everything was in Watsonville. Afterwards, there was a debriefing back at Thunderbird Real Estate’s office, and a comment was made that prices aren’t quite there for investors yet.
Well, that’s as may be. However, from everything I have heard and read, most professional investors never pay list price. They may write up 10 or 20 offers for each one that actually gets accepted. I don’t know that you’d need to write up 20 offers to get a decent price on a place in Watsonville, but It’s true that the asking prices are not quite to the point where they are obviously a screaming deal for a true, pure investor. But they are very close, and in many cases, it’s possible to negotiate a price down to the point where it does make sense.
There were recently a couple of listings in Watsonville where the asking price did make sense to investors - and those properties sold in under a week. That’s the thing - when something is blatantly cheap like that, don’t expect it to sit on the market long. There is money around, but it’s smarter money than it used to be. It’s also faster moving money, so if you want to take advantage of this market, you’ve got to be fast moving, too.
Posted by SantaCruzBroker at 6:06pm
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Watsonville Foreclosure Tour
February 26, 2008
No, we won’t have a cool bus like the guy in Stockton did as seen on 60 Minutes. But here’s what we do have: a bunch of folks interested in buying some investment-grade real estate down in Watsonville. We’re going to meet at my office in Capitola on Saturday, March 1 at 11 AM, and then make our way down to Watsonville. So far, most of the folks who are coming along are from the Santa Cruz Real Estate Investment Club, which I mentioned a few blog entries ago. If you’re not a member, this might be a good chance to meet some of the people involved and see if maybe you’d like to join too.
We are going to see about a half-dozen different REO properties that are presently for sale, all of which represent good opportunities for investors. I just spent the last hour or so going through every house and condo listing from Larkin Valley down through Watsonville, and I found that there are seventy listed REOs in that area.
Most of these REOs are not what I’d call investor grade - most of them are consumer grade, which is to say, they are priced for owner-occupants, not for investors. Investors need to pay less than retail consumers, because a true investor is looking for cash flow with a relatively small down payment - that is, he’s looking to actually get a return on his investment month to month, just as if he had it invested in an IRA or something.
But there are a few investor grade listings out there, and that’s what we’re going to be seeing this coming Saturday, March 1. If you are interested, just meet us outside my office at 3555 Clares Street (Suite WW) - next to the Fresh Choice Restaurant. We’ll probably want to carpool, but if you want to follow along, that’s fine - we will make copies of the properties we are going to see, if you have a GPS unit in your car or know Watsonville well, feel free to drive by yourself and just meet us at each property in turn.
I hope you can join us!
Posted by SantaCruzBroker at 9:02pm
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Santa Cruz Real Estate Investment Club
February 19, 2008
Today I had the honor and privilege of making a presentation at the Santa Cruz Real Estate and Investment Club. They hold weekly meetings, every Tuesday at 6:30 PM at the 41st Avenue office of Santa Cruz Title Company. They also have a Santa Cruz Real Estate Investment Yahoo Group on-line.
I cobbled together a PowerPoint presentation, about 20 slides or so, about some market statistics and the opportunities that are there for investors in Watsonville who want to buy short sale or REO real estate. I had 30 minutes to talk, it actually ended up being closer to an hour because there were a lot of questions from the people who were there.
It’s kind of amazing how much opportunity there is for investors down in Watsonville, but there’s so few people right here in Santa Cruz who know what’s going on down there. I think it kind of speaks volumes about the schism in our beautiful little county here.
Anyway, I had fun doing the presentation, and I’m going to try to do some more such presentations at other investment clubs in the area. I’ll keep you posted.
Posted by SantaCruzBroker at 10:57pm
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Median Santa Cruz home price drops to $599,000
February 16, 2008
Finally, the real state of the Santa Cruz county housing market is starting to show up in median home prices:
[From Santa Cruz Sentinel - Median home price drops to $599,000]
By JONDI GUMZ The median price for a single-family home in Santa Cruz County dropped to $599,000 in January, down 18 percent since December and a level not seen since 2004. … Only 63 sales closed escrow, a new low, the previous was 107 in 2006. A third of the January 2008 sales were for homes less than $500,000, more than double from previous months, and the subset of sales over $1 million, which had been as high as 25 percent, was 14 percent, the lowest in months.
For too long, the median home price has defied the reality out there on the streets, giving many buyers and especially sellers a false sense of what’s happening. Sometimes, we would see the median price inch up month over month, but for a long time it held steady at over $700,000.
But now, there’s been a significant drop in the median price, down to $599,000. Of course, it is worth noting that this is the figure for the county as a whole, and that some areas continue to hold up their values very well. That would be the usual suspects - Santa Cruz, Capitola, and pretty much anything near the beach.
And don’t go blaming Watsonville on being a drag on prices - hardly anything is selling down in Watsonville, although it had a much better month in January than it did in December, which was pretty much a train-wreck for sales. No, these lower-prices are county-wide, and even in Santa Cruz and Capitola, there are more bargains to be had than in recent years past.
The article is a good read, and it mentions that inventory is relatively low in many parts of the county, that many people who might want to sell are keeping their homes off the market, because now is not a good time to sell. That’s true, but what’s left unsaid is, what would happen if these same people found themselves in a situation where they had to sell?
Might we start seeing rising foreclosures in the rest of the county? Up until now, Watsonville (and to a lesser extent, Boulder Creek and the rest of the San Lorenzo Valley) has grabbed the lion’s share of the foreclosure activity. That’s because people tried to sell their houses, and found there were few buyers for them at the prices they were asking…and when you can’t make your house payment, and nobody wants to buy your house…you know the rest of the story.
Is this what lies in store for more of Santa Cruz county? I sure hope not, because what’s going on in Watsonville is pretty heartbreaking.
Posted by SantaCruzBroker at 9:46am
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