Pricey Homes Sell
Capitola resident Ciro Milazzo has been waiting for the home sale statistics for August.
“My son’s been looking to buy for a number of years,” he said. “I keep telling him, ‘Hang on. It hasn’t hit the bottom yet.’ ”
But the median home price in Santa Cruz County hasn’t plummeted, even though the number of sales - 129 - represents a 12-year low and the number of homes on the market - 1,321 - is the highest in 11 years.
Gary Gangnes of Real Options Realty, which compiles the figures, reports the August median sits at $770,000, compared to $775,000 in July. That’s less than 1 percent difference.
Why is that?
Like Bill Murphy in the film “Groundhog Day,” local real estate observers are seeing a replay of trends seen earlier this year. A sizeable number of homes sold for more than $1 million, and a small number of homes sold for less than $600,000, so the median hasn’t shifted much.
In August, there were 27 buyers for million-dollar homes, about 21 percent, and 22 sales were for homes less than $600,000, about 17 percent. In July, 36 of the 143 sales were for more than $1 million, about 25 percent, and 26 sales were under $600,000, about 18 percent.
Both subset percentages are staying in the same range, Gangnes said.
The most expensive home sold in August: 8 Potbelly Beach, Aptos. Price $4,295,000.
Next on the list: 950 Via Malibu, Aptos, $2.3 million and 4040 Empire Grade Road, $2.245 million.
Million-dollar homes have been the most frequent type of home sold in Santa Cruz since November, according to a new Web site, santacruz.whoboughtwhat.com, which tracks home buyers and sellers.
Of the 1,423 homes — including single-family, duplexes and condos — sold in the past 10 months, 272 commanded more than $1 million.
The next largest group of sales, 257, were homes above $600,000, followed by 236 homes sold for more than $700,000.
“It is interesting so many people can afford million-dollar homes,” said Milazzo.
Who are they? Software programmers, a physician, a real estate investor, and a children’s book author, to name a few, according to santacruz.whoboughtwhat.com. They have the wherewithal to invest in real estate at this level.
The Web site mixes condos and single-family homes, and a mouse click generates a map chock-filled with pointers indicating sales from Santa Cruz to Rio del Mar. Condos on Beach Creek Road in Scotts Valley are selling in the $400,000s and the Swan Lake condos on 14th Avenue in Live Oak, previously apartments, are selling in the $300,000s.
In contrast, Gangnes produced a spreadsheet devoted to single-family homes, and the number of sales on the low end is quite skimpy: four below $400,000, 10 below $500,000 and eight below $600,000.
The more expensive the home, the more sales there are: 20 below $700,000, 25 below $800,000, 16 below $900,000 and 19 below $1 million.
Where are prices headed?
No one has a crystal ball, but the Unsold Inventory Index, a harbinger of the future for prices, is at 10.2 months in Santa Cruz County. The index, which is based on the number of homes on the market divided by the number of homes sold, shows how long it would take to deplete the inventory at the current sales rate.
Generally, when the index exceeds 10 months, that heralds declining prices.
However, Gangnes points out that the countywide index does not accurately reflect what’s happening in different parts of the county.
In Watsonville, for example, the index is 30 months, but in Scotts Valley, Soquel, Santa Cruz and Capitola, the index is about five months, closer to the four-month mark, where prices are likely to rise. The index for Aptos, Live Oak, San Lorenzo Valley is between six-10 months, indicating price stability.
For those who are wondering why the Gangnes report wasn’t ready by the 10th of the month like usual, the answer is: a technology improvement.
Gangnes gets sales data from the Multiple Listing Service, which installed a software upgrade that halted some of the automated tools he uses for his report. As a result, he had to do some manual checks, which took more time.
Milazzo, whose son wants to become a homebuyer, thinks it’s crazy for the median to hover in the $700,000s.
But that is where it is.
August single-family home statistics
Number of listings: 1,321 (11-year high)
Number of sales: 129 (12-year low)
Unsold Inventory Index: 10.2 months
Median price: $770,000