The Scotts Valley real estate market, like most of the market in Silicon Valley has indeed cooled somewhat as we saw interest rates for mortgages almost double, along with the higher cost of gas, the stock market struggles, talk of inflation and a recession, the war in Ukraine and many other factors finally take its toll on home buyers including seeing what I call “buyer fatigue” taking place at least two months earlier then the norm. The market, from my perspective, peaked around the third week of March this year as economic uncertainty was on the minds of buyers and had them holding their money a little closer to their chests.
But as we have seen the mortgage market start to settle down a little, meaning it has become a lot more stable then the first couple of months when the market started taking its hits as rates shot up dramatically, things are getting a little more clearer on the home front. And while the real estate market is not the flamethrower market we have experienced over the past couple of years and as recent as the first quarter of 2022, real estate prices have somewhat held their own. In some cases, certain properties have received multiple offers and sold for quite a bit higher than asking such as 211 Sunridge Drive in Scotts Valley which was a 3 bedroom, 1 bath single family home with a 1 car garage that sold for $126,000 above asking price, at $1,425,000 in late July.
– This home sold for $126k over asking in late July –
Why? Because certain properties that are unique, or are in highly desirable neighborhoods where there is typically very little inventory, will command top dollar and then some. Homes that are in housing developments that have a fair amount of continuous inventory and have similar homes in that neighborhood have had some struggles, with the exception of those that have had major upgrades or sit it a pristine location of the development.
One of the things I say when asked about property values is to forget the first quarter of the year and price your home at a more realistic price while using closings of today or the past 30 days or so. Don’t get too caught up in thinking we are still in a red hot market because we are not. Some of the prices we saw in the first quarter were pretty crazy as buyers with a lot of cash from stocks were throwing it around and sellers were with a wide net trying to catch it all. But that was more of an aberration then reality. We are indeed in a good market and if you price your home accordingly, while it may take more time to sell than in the past, it will sell and you should get your price or close to it, provided that you are priced right and your home is properly prepared, staged and marketed.
And if I may add, before I go into the numbers, is that one of the reasons why home values have stayed steady is because at the end of the day, there is still a housing shortage. They are not making homes fast enough for the demand even if the demand has waned somewhat. We live by the land of opportunity which is Silicon Valley and although there has been some price correction versus the first quarter, the bay area is still a lot pricier than here in Scotts Valley and the job market in Silicon Valley remains solid. So price it right, market the heck out of your home and be patient. It will sell if you do the above.
BY THE NUMBERS
Let’s take a look at some interesting and telling stats that I believe paints a true picture of where we are today. Remember, the numbers never lie.
Today, as we speak, there are 56 active and pending sales in the Scotts Valley area. Out of those, 52 are single family with 27% of them being in pending status. That is actually not a bad figure and more closer to the norm. I have said throughout the years that 33-38% active vs. pending ratio is a very strong sellers market. Right now, 27% is a little more normal and while it remains a seller’s market in my opinion, it is a little more friendlier towards buyers and that is not a bad thing.
– This townhouse went on the market mid August and is expected to sell above asking within 10 days –
Condos and townhouses however are red hot as there are only 4 for sale, with three of the four already in pending status. The only one that has not sold is a listing I just put on the market this week at 285 Civic Center Drive and I expect it to sell above asking price with multiple offers. So unless another condo or townhouse is listed soon, there will be no available ones for sale by next week.
Here is another very telling stat: the average days on market right now for active and pending listings is 67 days. In fact, pending sales are right at 60 days on market average and when those close, you will indeed see figures shift to higher days on market. Meaning, it is right now taking 2 months or more on many properties to go into escrow. Not all will take that long as stated above, so many of them are selling a lot quicker. But it is good to know that it is not you or your house that is taking so long, it is the market that is now taking its time. Not too long ago buyers were running to make offers, now they are taking their time and being more selective. But the good thing is that they are still buying. Just be patient and if you do things right, you will get your home sold and probably at or close to where recent comparable sales are showing.
The average sales price in the last 90 days for single family homes is $1,551,668 and these closings are averaging $16,465 above asking price. Last year, in the exact same time frame, single family homes were averaging $1,617,830 with an average of $45,380 above asking. That is about 3 times the amount last year above asking then this year.
Right now condos and townhouses are averaging 10 days on the market and over $100,000 above asking price. That market is as hot as I have ever seen it. Just to compare, last year they were averaging just over $30,000 above asking.
In closing, I offer the following advice if you are planing on selling:
Make sure that your home shows at it’s best. Do not underestimate the importance of de-cluttering, a fresh coat of paint if it is needed, along with new carpet and flooring as needed. Make sure the exterior also looks at its best as it is the first thing buyers see when they drive up.
You do not need to spend an arm and a leg on many of these items. If you have a moment, read my article where I share some very affordable and cost effective ways of getting your home ready to sell that will give you huge returns.
In addition, make sure that you work with an agent that has a powerful marketing and action plan that includes professional photos, video, 3D virtual tour, floor-plans, a property website and more. But what good is a beautiful home that looks and shows at its best and is priced right if you do not have a strong marketing plan to reach potential buyers? Align yourself with an agent that utilizes today’s most powerful marketing strategies that includes social media and more. This is more important today than ever.
If you are buying, you do not have a lot more selection of homes because there are a lot less homes for sale this year than last year, but you do have a few more with more favorable terms when homes are on the market a little longer. With rates stabilizing as they have been doing lately, don’t be surprised if you see an upwards tick in market activity so if you find something you like, ask sellers to pay some of your points that will effectively lower your interest rate. Hey, why not? 🙂
As always, happy selling and happy buying!
REALTOR® since 1986
DRE # 00921165
Keller Williams Realty
831-252-3959 Direct Line
ABOUT ROB: Robert Aldana is a 36+ year licensed real estate veteran with Keller Williams Realty, and also a long-term resident and homeowner in Scotts Valley.
Robert is the agent chosen by more Scotts Valley area home sellers and buyers than any agent or team, and has been awarded the Santa Cruz Sentinel Readers Choice Award as the Best REALTOR® in Scotts Valley for four straight years, along with being voted Best Scotts Valley REALTOR® in 2022.
Robert is also the ALL-TIME leading real estate agent in Scotts Valley sales, and most recommended agent in the NextDoor online community.
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