Assessing the 2023 market for Santa Cruz, Monterey & the Bay Area (click on title)

January 2024 market stats














FEBRUARY 2024

More people touring homes in 2024 but not buying so far.

More potential homebuyers are touring homes now, after early January's weather kept many on the sidelines, according to Redfin's Homebuyer Demand Index. This measures requests for tours and other buying services from Redfin agents, and that index rose 6 percent last week compared to the prior week. However, applications for mortgages to purchase a home declined from a week prior and pending sales had their largest decline in four months. Agents expect the increase in tours to convert into an improvement in pending sales over the next few months because home listings and sales usually pick up as spring approaches.

This week's announcement from the U.S. Federal Reserve bank that left interest rates untouched and indicated that they're unlikely to cut rates in March suggests that mortgage rates are unlikely to fall significantly in the next few months. Economists still expect interest and mortgage rates to gradually decline by the end of the year.












How to know if a house is overpriced

If you're selling your home, you must understand that pricing your home correctly from the beginning is critical. The most common reason a home doesn't sell is that it is overpriced. But how do you know if you have an overpriced house? There will be signs that will be screaming for you to notice. Without considering them, you'll put yourself in a terrible spot.

Overpricing a home can create damaging effects, period. The probability is that if you price your home too high, in the beginning, you will likely end up with less money in your pocket, which is not the goal when selling a home.

To sell for the most money, you mustn't overprice it. It sounds counterintuitive that asking for more leads to less, but it's true in many circumstances. If you happen to make the mistake of overpricing your home, you must immediately identify this mistake and make a change immediately.

How does a seller know if their home is overpriced? There are many telltale signs to know if your pricing does not meet market expectations.

  • 1. An overpriced property is a home listed significantly higher than its market value.
  • 2. Overpricing can occur due to several factors such as location, demand, and speculative market conditions.
  • 3. Overpriced houses often experience difficulty in finding buyers and may stay on the market for extended periods.
  • 4. Buyers should exercise caution when considering an overpriced house as it may not provide a good return on investment.
  • 5. Working with a knowledgeable real estate agent can help buyers identify and avoid overpriced houses.
  • 6. In the last year, there has been a 12% increase in overpriced properties.
  • 7. Studies show that 9 out of 10 homebuyers believe they have encountered an overpriced house at least once during their search.
  • 8. On average, overpriced homes stay on the market for 23% longer than homes priced appropriately.
  • 9. Overpricing a house by just 5% can decrease the chances of selling it by 42%.
  • 10. One of the top mistakes by home sellers is putting their house in a price range that doesn't make sense.

    Ways to Tell If Your Home is Overpriced

  • Your Home Is Priced Much Higher Than Your Neighbors
  • You've Had Very Few or No Showings
  • The Days on Market is Much Higher Than the Local Average
  • There Have Been No Offers Submitted
  • You Hired the Agent Who Recommended a Much Higher Price
  • Neighbors Homes Are Selling & Yours Is Not
  • The Open Houses Are DUDS
  • Internet Traffic Is Very Low
  • Showing Feedback Indicates Improper Pricing
  • You've Received Lowball Offers
  • Your Agent is Burying a St. Joseph Statue
  • Your Home Didn't Sell & Expired

    An overpriced house isn't challenging to spot. When a home is too expensive, buyers know it. It usually is obvious. Remember this when you want the most money possible in the shortest time.








    Why so many cash buyers?

    I had a reporter ask me this week why the statistics he is seeing shows the number of cash buyers in our market has risen. My answer to him is that there is a lot of cash out there and has been for a few years now.

    2008-2012 saw an increase in buying power for some while others were losing their homes due to the great recession and when inventories started drying up, prices rose. What does this create? Equity…

    Then we had Covid, and everyone sat on their hands for two years. Now the pent-up demand has surfaced, and people are moving, relocating, and buying in areas they don't have to actually work in.

    The numbers in Santa Cruz County show that in 2022 there were 1,604 residential sales and 37.5% were all cash. In 2023, the number of sales declined to 1,371 but all cash buyers rose to 42%.

    Besides this, you throw in the rise in interest rates. This has brought out the cash buyer in droves. Cash means better negotiating and lower prices. List to sales price ratios have dropped substantially since the peak in mid-2022. What was once 121% is now 103% in some areas and what was 111% is now 98%.



    "That's Who We R"

    Highlighting the value and unmatched expertise that REALTORS® deliver across the country most consumers work with a real estate professional because they recognize that technology is no substitute for an expert helping them to navigate risk, avoid pitfalls, and obtain results. Here is a message from the National Association of REALTORS(R) Interim CEO Nykia Wright.

    Assessing the 2023 market for Santa Cruz, Monterey & the Bay Area

    Comments: I'm thinking JANUARY is telling it all. Just look at the decline in new listings from 2022 to 2023 and 2024 still not back to those levels of 3 years ago. Santa Cruz down 46% yet only back up 73%. Monterey down 34% but only back up 3%. Santa Clara down 31% but only backup 20%. Sales, basically the same and new listings year over year. Even the median price is down in Santa Cruz 12% from 22 and 21% from 23. Monterey is down 6% and Santa Clara up a tick but down 11.5% from 22. List price to sales price ratio tells me that there have been a number of cash sales or sellers are finally negotiating. My stats show these are the lowest number since 1992 at least in Santa Cruz County. (Display of MLS data is deemed reliable but is not guaranteed accurate by the MLS)