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Santa Cruz Real Estate Market is Hot

BY SEB FREY

The other thing you need to do is to neighborhoods hugging the coast. take action – here, and now. If you see The road to homeownership isn’t for a future for yourself as a homeowner, the faint of heart – not in this town, you need to take the steps today that and increasingly not anywhere in will put you in a position to be a California…or any of the economically homeowner tomorrow. That means successful region of the United States, calling a mortgage broker and getting for that matter. pre-approved. That means taking a hard But there’s no question that the ends look at your expenses and seeing what justify the means! There’s a word that’s can be cut. That means looking at how become very popular in the past couple you can increase your income, through of months in American politics: equity. promotion, a change in career, whatever. Equity! Everyone needs it, and the It may also mean looking at how tried and true way to build it is through you can increase your down payment – homeownership. I hope you will soon be possibly with help from family, selling on the road to obtaining your fair share

It’s no secret that right now the real A couple of years ago I interviewed some assets, or tapping into retirement as well. estate market in Santa Cruz is hot. Leslie Appleton-Young, then Chief savings. It may also require that you Actually, you could say it’s overheated! Economist for the California lower the bar – instead of a single-family There’s no shortage of stories of homes Association of REALTORS. I asked her home, you may need to look into a receiving dozens of offers and selling what number she looks at most when condo, townhouse, or possibly a mobile hundreds of thousands of dollars over she’s forecasting what’s going to happen home. You may need to widen your asking price. to home prices, and she replied with one geography and consider areas outside the

But in a way, that’s yesterday’s news. word: Inventory. The thing to know about the real estate Springtime is when we traditionally market is that it’s dynamic. What’s see more inventory coming onto the true yesterday may not be true today, market – a lot more. However, demand or what’s true today may not apply has been so strong that we haven’t seen tomorrow. much of a build-up in inventory. In

For example, interest rates have most neighborhoods, and most price risen substantially over the past several segments, homes are selling about as fast weeks – up about 0.75% give or take. as they hit the market. That might not sound like much but Yet might demand weaken, just as considering that the best rates a couple months ago were 2.5%, 0.75% is a big jump. Today, 30-year fixed mortgage more homes are coming on the market? Might the jump in mortgage interest rates and buyer fatigue with the bidding rates are bumping up around 3.3%. wars ultimately conspire to tamp down

That kind of jump up will definitely demand? Will inventory start to build have an impact in terms of affordability and prices flatten, pushing the market to – buyers won’t have the same borrowing something closer to a state of balance? power relative to their income. Many Eventually – one day! – that will people are expecting that this increase in happen. But there’s no telling when. mortgage rates will therefore result in a Might the $1.9 trillion in COVID relief decline in real estate prices. and stimulus slingshot the market to

It’s easy to see why people think that – ever higher heights? Could the Biden except that there have been many periods administration and their oh-so-slim in history where interest rates rose - and majority in congress actually manage to home prices rose, right along with them. squeak out a $3 trillion infrastructure (or The reason for this is that interest rates whatever they’re calling it) plan, virtually rise as demand for money rises (or at assuring robust economic growth for at least, the projected demand for money). least the next couple of years? Demand for money rises when economic It’s quite possible! That could activity picks up. Stronger economic happen - the stock and bond markets activity points to job and wage growth – are apparently betting big on just that which means there will be more buyers eventuality. Hence the rising asset prices out looking for property, which will boost and climbing interest rates. prices, even as rates rise. What are buyers to do in a market

If you’re looking to see moderation in like this? If you ask me, it requires two home prices, you’d do better to keep an things. First is a leap of faith. To get into eye on inventory. For years now, we’ve a house in today’s market, you have to be been suffering through a dearth of homes fearless. You have to stop worrying if the for sale. Too many buyers chasing too bubble is going to pop. In other words, few homes has resulted in steady prices you have to be present. You have to increases for the past 10 years or so. focus, relentlessly, on the here and now.

Springtime is when we traditionally see more inventory coming onto the market – a lot more. However, demand has been so strong that we haven’t seen much of a build-up in inventory.

 Realtor Seb Frey is the author of the book Get It Sold! Check out his videos on Facebook and YouTube – search for “Seb Frey TV.” Learn more on his website and reach him at sebfrey@sebfrey.com

Valerie Mishkin Realtor®

831.238.0504 | 831.426.4100 Cal Dre# 02092111 VMishkin@BaileyProperties.com ValerieMishkin.MyHomeHQ.biz