January 9th, 2014 – The numbers are out and the Scotts Valley Real Estate Market in 2013 was a strong market indeed.
Where Are We Today?
As inventory continues to drop in the beginning of 2014 with only 29 active single family homes for sale and only 1 active condo/townhouse for sale on January 8th, the numbers show that supply and demand continues to favor home sellers as they continue to get top dollar for their homes. The main reason for this is because there is a limited amount of homes for sale while there still remains quite a few buyers looking to buy and take advantage of current low interest rates. Although rates recently dropped after rising for three straight weeks and are sitting at around 4.5% for a 30 year fixed rate mortgage, they will more than likely rise with a stronger-then-expected employment report.
Where Were We Last Year & What Does it Mean?
Some interesting figures and stats in the Scotts Valley housing market in 2013 are:
Average list price vs. sales price
- Average original list price: $822,502
- Average final list price: $788,199
- Average final sales price: $776,716
What these numbers indicate is that many home sellers priced their homes a little higher than what the market and buyers were willing to pay. This had many home sellers eventually lowering their list price from an average of $822,502 down to $788,199, which lead to them selling their home at 99% of the final list price. The percentage of what a home sold for versus what it was originally listed at before they had to reduce the price is 94%.
Price it Right From the Beginning
What this really means is that you will sell your home at top dollar and as close to asking price if your home is priced right. Home sellers tend to lower their price when their home does not sell after a period of time. Statistics have shown that the longer that a home stays on the market, the lower it will eventually sell for.
If you look at the reports of last year’s sold and closed properties, you will see a trend of homes that sold at 99% or more of their list price also happened to be homes that were on the market for a less amount of time. Homes that were on the market longer ended up selling for less than 99% of final list price in many cases.
The average days on the market (DOM) as a whole, which means the time it took to receive an acceptable offer, was 56 days in 2013. The month of February had the longest DOM at 78 with the lowest being just one month later in March at 26.
What Will We See in 2014?
2014 should be another good year for the real estate market with many experts stating it will be a banner year for home prices and market activity, while others think it will be a solid and steady year. I tend to agree with the latter and think that it will be a solid and strong market with appreciation being anywhere between 5 and 7% in 2014. Could the market appreciation reach double digits? Its always possible, especially if spring brings on more homes and buyers as rates go up, if they go up. An increase of interest rates could see buyers who were on the fence jumping in and causing a buying frenzy. However, the likelihood of appreciation hitting 10% in Scotts Valley this year is a probably not. If I were to put a number on it, I would go with 6% appreciation for 2014.
What’s the likelihood of it being less than 5%? I do not see that at all as demand far succeeds supply and although I see it evening out a little more come spring, I still see more home buyers than home sellers this year. Remember, 6% is my prediction.
Tips for Home Sellers
Get your home ready by doing what you can to make it as presentable as possible. You need not put in a new kitchen or other expensive upgrades, just make sure it is clutter-free and consider a fresh coat of paint and neutral carpet if it is needing it. Read my free UPDATED for 2014 Home Seller Mega-Pack that goes over tips on how to get your home ready to sell and how to get top dollar for your home. You can download it by clicking here.
Price your property right and make sure it is competitive in today’s market. As the 2013 report will show, you will get more dollars and you will get them faster if you price it right to begin with.
And last, but not least, list your home with an agent who has an Action Plan that will show you what they will do to sell your home. Anything less than having an action plan in place is just winging it and you do not want to be winging it when it comes to one of the biggest investments and sales you will have in your life. And yes, an Action Plan is also included in the Home Seller Mega-Pack.
Tips for Home Buyers
Get your finances in order and get pre-approved as soon as possible. If you see something now that fits what you want, jump on it as the market will only get hotter come spring time, and with the expected appreciation coming this year, the longer you wait to buy, the more you will pay in price and maybe even in higher interest rates. Yes, there will be more homes in spring, but there will also be more buyers too. Probably more buyers than sellers.
Work with the Right Agent
In either of these cases, whether as a home seller or homebuyer, work with a local agent who knows and understands the market and has experience and a track record. Ask to see letters of recommendation and ask them how they are going to represent you, and what is their plan.
As in any case, being informed and prepared will usually lead you to making better decisions.
That’s your Latest Scotts Valley Housing Market Report!
Robert Aldana is a 29+ year licensed real estate veteran with American Dream Realty in Scotts Valley, and also a long-term resident and homeowner here in town. He is the founder of MyScottsValley.com and the popular local news and events page at Facebook.com/MyScottsValley.
He was voted as the “Rave” winner in the category of “Favorite Real Estate Agent” in the Scotts Valley Press Banner’s contest for 2014, and also awarded the Scotts Valley Man of the Year in 2014 for his contributions to the community.
Robert was also a nationally syndicated real estate journalist and was a highly sought after interviewee on the topic of real estate by local, national and even international media, in addition to appearing on HGTV and local NBC’s “Best of the Bay”. Many of his articles and interviews can still be read at RobertAldana.com, DeadlineNews.com, RealtyTimes.com, Forbes.com, among many other real estate and finance news sites and publications.