Cooling of Scotts Valley Area Real Estate Market Continues

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With Hot August Nights past us, the Scotts Valley real estate market never really got hot this late summer in August as some expected, and the cooling trend has continued into September as homes sit on the market longer with less homes going into contract than normal.

At the moment there are 53 single family homes (SF) with 43 being in active and available status and only 10 being in contract. That is just under 19% pending status which is quite the difference from what we saw in February when we saw 43% in pending status on February 18th. We have seen only 3 SF homes go into contract in the past 10 days. It is rare when we see such a low percentage of homes being in pending status. Earlier in the year when we experienced a lot of rains and slowdown because of weather conditions it was at 25%. On July 21st of 2018 I reported pendings at 36% which is about double what they are today and July is typically not as hot as late August gets going into the holiday season.

This summer was also a cooler trend in sales as there were a total of 43 sales and closings between June 1 through September 1 versus 47 in 2018 at the same time. The average days on market this year during that time was 35 days vs. 29 in 2018, just under a week longer that homes stayed on the market.

But the most telling stat for me is the average sales price to list price ratio, the percentage buyers paid versus what sellers were asking. In the above time frame of 06/01/2019-09/01/2019 buyers paid 97.6% of what sellers were asking on average. At the same time last year buyers were paying 100.01% of asking price, pretty much averaging what they were asking and not really much more. That is a swing of 2.4% which at the average list price of SF homes being $1,333,028 in that time frame, it means that buyers were paying on average $31,992 less then asking price. But remember, as the sales price gets lower, that number gets lower because it is based on sales price and not actual dollar amount. But you get the picture.

This 2 bedroom townhouse in Scotts Valley recently sold and closed for $710,000

CONDOS & TOWNHOUSES REMAIN SOLID IN ACTIVITY

However, the condo and townhouse market heated up pretty quickly after a slower start earlier in the year as we had a total of 14 closings with an average days on market of 16, average sales price of $681,795 at a list price to sales price ratio of 100.01% on average between June 1st through September 1st of 2019. That is a solid figure and expected as the price of single family homes continue to soar.

Currently there are a total of 6 condos and townhouses on the market with 4 of those already in pending status. The average list price is $649,715.

THE VERDICT

I think that we are indeed continuing the trend to a more ‘normal’ market when homes stay on the market longer and buyers being able to negotiate a little more on their purchases. It is in my opinion a more healthy market when there is a more balanced market and if I were to gauge it on a scale of 1 to 10 with 10 being an extremely hot seller’s market, I think we are at about a 6, and maybe even 5.5 to 6. The hottest we ever saw in Scotts Valley was about an 8.5 and I say that knowing that the Silicon Valley market reached as closer to a 10 as it could. But Scotts Valley is different. Even though there are still buyers coming from Silicon Valley, it will not be the feverish market that Silicon Valley was or is.

SELLER TIPS: Although there are certain properties that are unique, are in a highly desired area and will sell faster and for more than others because of this, most home sellers need to understand that their homes are going to be on the market a little longer. It is what it is. Sellers need to be realistic with their pricing and really need to instill the use of top level marketing. I am still surprised when I see homes with a couple of iPhone pictures that are blurry on MLS, 1 photo or even no photos. I cannot stress enough the importance of hitting the ground running when it comes to being ready when you hit the market.

Buyers today are different than they were years ago. Today they are at a local coffee shop sifting through their iPhones and iPads as they view new listings that are coming up. Those new listings that come on the market with bad photos or no photos get passed through with buyers many times not coming back to that home. You have to remember as a home seller that you never get a chance for a first impression. Don’t skimp on good marketing, it is the key to a faster sale at a higher price.

What’s hot? Individual property websites with videos (click here for sample), 3D Virtual Tours and floorplans are the rage with floorplans being a huge bonus for home buyers. I can’t tell you how many buyers reach out to me that state how much they really appreciate floorplans as much as anything. The 3D virtual tours also are a big hit for buyers as they can do their own virtual open house whenever they want and see exactly what your home looks like. Videos give them an idea of the outdoor surroundings and combined with all of the above buyers gravitate to homes that have these features available for viewing.

BUYER TIPS: This is your time. If you see something you like don’t be afraid to negotiate. This is the time you have been waiting for for a long time as rates continue to stay low and now more homes are on the market a little longer.

As always, Happy Selling and Happy Buying!

Robert Aldana
REALTORĀ® since 1986

DRE # 00921165
Keller Williams Realty
831-252-3959 Direct Line

[email protected]
www.robertaldana.com

ABOUT ROB: Robert Aldana is a 33+ year licensed real estate veteran with Keller Williams Realty, and also a long-term resident and homeowner here in town.

In 2015, 2016, 2017, and 2018 Robert has been the agent chosen by more Scotts Valley area home sellers and buyers than any agent or team, and Robert was awarded the Santa Cruz Sentinel Readers Choice Award as the Best REALTORĀ® in Scotts Valley for 2016, 2017 and again in 2018. Robert is also the ALL-TIME leading real estate agent in Scotts Valley sales.

Robert is the most recommended real estate agent in the neighborhood social media site NextDoor, and was also voted 2017 Favorite Neighborhood Real Estate Agent in Scotts Valley in the first NextDoor Fav Business Awards by local residents, and was a neighborhood favorite again in 2018.

 

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