Existing-Home Sales In Santa Cruz County Dipped 9% in February
By Liz Kroft
Key Highlights
Existing-home sales dipped in February to 114, down 9% from the prior month yet up 22% from one year ago.
The median existing-home sales price came in at $1,052,500, 17% higher from one year ago
As of the end of February, homes listed on the MLS were 17 units higher than the same time period in 2020.
Existing single family home sales dipped slightly in Santa Cruz County in February, yet were up year over year for the fifth consecutive month.
Existing single family home sales totaled 114, a 9% decrease from January. Sales in total climbed year-over-year, up 22% from a year ago (89 in February 2020).
Home sales continue to climb early this year as buyers quickly snatch up nearly every new listing coming to the market. Sales easily could have been even higher the first two months of the year if there had been more inventory and more choices for the hordes of buyers in the market who are trying to take advantage of the incredibly low interest rates.
The median existing-home price for single family homes was $1,052,500, up 17% from February 2020 ($900,000), as prices increased in most neighborhoods across Santa Cruz County. February’s price jump marks nine straight months of year-over-year gains.
Whereas much of the economy has suffered due to COVID-19, the housing sector has been one of the few bright spots. In the National Association of Realtor’s (NAR) latest quarterly report, released in early February, home prices in every tracked U.S. metro area increased during the fourth quarter of 2020.
"Home sales are continuing to play a part in propping up the economy," according to Lawrence Yun, chief economist at NAR. "With additional stimulus likely to pass and several vaccines now available, the housing outlook looks solid for this year.”
Industry experts expect more jobs to return, which will buoy home buying in the coming months. I anticipate that existing-home sales will continue to increase, even as mortgage rates are likely inch higher due to the rising budget deficit and higher inflation As rates rise, buyers who have been on the fence will likely dive into the market and sellers may be incentivized as this may be perceived as nearing the top of the roller coaster as far as price increases go.
Total housing inventory of existing single family homes at the end of February amounted to 294 for 2021, up 6% from the same time frame one year ago (277 homes). Unsold inventory sits at a 1.19-month supply at the current sales pace.
For reference a housing market with 4 to 6 months of inventory is historically considered to be in equilibrium, anything below 4 months is considered a seller’s market and anything above 6 months a buyers market. Santa Cruz County has been below 2 months of inventory since June of 2020.
Homes remained on the market for an average of 41 days in February, 7 days longer than January but a whopping 22 days faster than February 2020. Fifty-three percent of the homes sold in February 2021 were on the market for less than two weeks.
The first week of March mortgage rates started to rise, but they are still considerably lower than they were a year ago. A 30 year fixed rate mortgage is averaging 2.97% (compared to 2.81% a week ago) while a 15 year is averaging 2.34%. Still low. Buyers, sellers and industry professionals are keeping their eyes on rates with the expectation that they will only continue to inch up throughout the year. Initially I expect this will spur buyer demand and incentivize more sellers to list their homes, but eventually it will start to eat into purchasing power and begin to impact prices.
Stay tuned for next month’s look at the market.
Liz Kroft is a co-owner and Realtor® at Sol Property Advisors and the President of the Women’s Council of Realtors in Santa Cruz County. Voted Best Realtor® in the Santa Cruz Sentinel Readers Choice 2020 - SLV.
831.854.7489 (cell) | liz@solagents.com | dre#01937727