A Daily Shot of News

Some sectors of the Santa Cruz real estate market are starting to rebound from record lows, although there remain significant weaknesses in the region’s economic climate. According to a May 3, 2010 article in the Santa Cruz Sentinel, “The county’s once hot commercial real estate market has cooled considerably, with nearly a million square feet of office space empty at the start of the year and asking rates dropping compared to a year ago. The market hasn’t hit the 1 million mark since 2004, according to Cassidy Turley BT Commercial, which reviews the data for Santa Cruz County quarterly.” The piece by Jondi Gumz went on to say that “University of the Pacific economist Jeffrey Michael predicts a slow five-year recovery for the state, with Silicon Valley showing early signs of growth. His forecast says sustained business investment is needed to sustain the recovery against forces such as state and local government cuts, foreclosures, and tight credit conditions.”

One important indicator of the health of the market, the average price of a Santa Cruz home for sale, rallied strongly in the month of April. According to a May 24, 2010 article in the Mercury News, “Santa Cruz County saw fewer single-family homes sold in April compared to a year ago, but the median price rebounded from $420,000 to $553,000, the highest in 20 months, as distress sales dipped. Two years ago, the midpoint of what sold was $661,000.” The article by Jondi Gumz went on to say that “There were 121 sales in April, with 43 percent selling for under $500,000, according to Gary Gangnes of Real Options Realty, who tracks the numbers.”

One general indicator of the entire Santa Cruz economy, not just the Santa Cruz real estate market, the jobless rate, recovered somewhat in April 2010. According to a May 21, 2010 article in the Santa Cruz Sentinel, “Santa Cruz County added 2,000 jobs in April, cutting unemployment from 15.2 percent to 13.5 percent, the state Employment Development Department said Friday, but job growth was less than usual for this time of year. The local jobless rate is higher than California’s, which is 12.3 percent, and the nation’s 9.5 percent.”

Like so many other markets across the country and particularly in the state of California, which has been especially hard-hit by the fluctuations in the national housing market, the Santa Cruz real estate market has seen vast devaluations in homes and condos throughout the past couple of years as the bubble burst on the seemingly endless rise in home prices. Average and median prices have plunged from their peaks, inventory has piled up and many homeowners have been forced into foreclosure by ballooning mortgage payments and rising unemployment.

However, not all news is bad news concerning Santa Cruz homes and condos. In fact, according to statistics from the Santa Cruz Association of Realtors, the end of 2009 saw the average price for a single-family residence hit its highest point since September of 2008: In November 2009, the average price for a single-family home in Santa Cruz County was more than $620,000 (although it fell back to just over $603,000 in December). Median prices showed stark improvement as well: the median price for a single-family home in December was $555,000, also the highest monthly figure since August 2008. Single-family homes inventory began to thin out toward the end of the year as well, with December finding just 631 homes on the market, the lowest level in more than two years.

Condo prices saw a resurgence toward the end of the year as well, with the average price for a condo in December 2008 at its highest point in five months, at over $378,500. The median price at the end of the year also maintained one of the higher monthly levels for 2009. The inventory of condos and townhomes showed signs for optimism as well, with the number still on the market in December 2009 at fewer than 200, the lowest level in more than two years.

The city of Santa Cruz saw the most sales volume of any town or city in Santa Cruz County in December 2009, with sales volume at more than $21 million. The city’s median sales price in December was at $578,000 for single-family homes, while the average price was more than $660,000. The Seacliff neighborhood had the highest median sales price in December of any Santa Cruz neighborhood, at more than $1.13 million, while Adult Village saw the lowest median price of $227,000. Most of the inventory still on the market in the Santa Cruz area is in the San Lorenzo Valley and Santa Cruz proper areas, followed by East Santa Cruz County and Scotts Valley.