Santa Cruz Home Bubble Prices
As we move to the end of 2009, many home Sellers and Buyers are wondering what direction home values are going ? As I have mentioned on previous blogs, we are still seeing a constant stream of foreclosures with unemployment and negative equity the driving reasons. So until we see unemployment improved and home prices stabilize, there will not be much improvement.
So where are we now ? As you can see in the graft below, homes in the Watsonville area have taken the biggest equity hit with median home prices off 57% from the peak of the market in 2005. In fact, Watsonville home prices are now below 2001 prices. In contrast, the median home price in the areas closer to the ocean like Rio Del Mar, Santa Cruz and Capitola are seeing median home prices off around 27% from the peak of the market. Home prices in these areas are about where they were in 2003.
If you are a buyer or seller in this market, this a good overall gauge of where property values are currently. However you do have to take into account that homes that right on the beach or have great beach access have been hit less. The market for these high-end beach homes have dropped off, but when they do sell its usually at prices less than 20% off the peak of the market.
Can we expect the home prices to keep dropping ? In the short term the answer is yes. This is due to the fact that banks are still releasing homes from their foreclosure inventory and we are also entering our seasonal slowest part of the year when prices normally are at there lowest. So with mortgage interest rates near record lows, home prices going lower, talk of another buyer incentive program by the government, it is a great time for buyers.
Monterey Bay Properties
(831) 588 0254
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