Bargains in the Condo Market

Santa Cruz Condos - Market Overview

August 2010

The best that can be said about last year is its over! Condo sales were up 12.8% from 2008.

The median price dropped 16% from 2008. The good news in all this is that prices bottomed out in the first quarter and started strengthening the last nine months of the year.

The year ended with inventory at its lowest level since March 2005, a sign that prices should keep firming.

Another positive indicator, as we start the New Year, is Days of Inventory, which is how long it would take to sell all the homes on the market at the current rate of sales, which ended the year at 97 days.  We have to go back to the boom years of 2004 and 2005 to see numbers that low.

Buyers are out there, but they're looking for bargains. Which begs the question, what is a bargain?

A deal has little to do with the sales price to list price ratio. Remember, you are going to have to live in that home and that neighborhood. The most important thing is to find a home, in a neighborhood, you want to live in. If the house is fairly priced, make an offer. But understand, if the house is fairly priced, or even a little under-priced, and it is a good house in a good neighborhood, there will be multiple offers. If you find such a home, you can't hesitate.

It is endemic among buyers that the deals are in bank-owned or short-sale property. But, banks have the property appraised before they put it on the market, and they price it at, or just a little below, market value. Which is why we're seeing multiple offers and prices going over asking.

The real estate market is very hard to generalize. It is a market made up of many micro markets. For complete information on a particular neighborhood or for an evaluation of your home's worth, call me.

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Susan Grant, David Lyng Real Estate, Santa Cruz to Carmel

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