Santa Cruz County Real Estate Report for February 2008

ECONOMY WEAK, BUT NO RECESSION: In a speech given late Thursday in Hawaii, Janet Yellen, the San Francisco Fed president, said an economic downturn - led by a decline in the housing market - will remain with us for at least the remainder of 2008. 'I consider it most probable that the U.S. economy will experience slow growth, and not outright recession, in coming quarters,' Yellen said. She warned that economic prospects are uncertain and downside economic risks remain. Read the rest of the story at http://money.cnn.com/2008/02/08/news/economy/yellen_speech/index.htm?postversion=2008020809 .

THE MORTGAGE INDUSTRY IS working hard to help more and more homeowners who are in difficulty, but obviously there is much more to be done. Among the subprime borrowers who have gotten help through permanent-loan modifications from a group of lenders, investors and nonprofits (dubbed Hope Now) are 150,000 buyers nationwide, while 395,000 negotiated repayment plans, which often involve a borrower getting back on track even though a few payments were missed.

LOCALLY AND NATIONALLY, mortgage application volume increased 3 percent during the week ending Feb. 1, according to the Mortgage Bankers Association's weekly application survey. Application volume was pushed higher by a 12 percent jump in purchase applications. Refinance volume fell 1 percent, but accounted for 69.2 percent of all mortgage applications.

OUR MARKET IS SEEING SIGNS OF REVIVAL: January stats are out and show a significant decrease in the number of sales (down 48.6% annualized), but the average sales price is still holding strong only down 8.6%. The biggest difference is that we are averaging 15 months worth of inventory County wide as compared to only 7 at this time last year. Individual areas of the County vary, such as Santa Cruz proper with 9 months and Watsonville at 24 months.

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January Statistical Highlights for Single Family Homes:

* Inventory up 21.9% compared to January 2006, and increased 2.4% from December 2007
* Sales down 44.0% compared to January 2006, and down 16.4% from December 2007
* Days on the market increased to 145, month prior 105, prior year 120
* Median home price decreased from prior month to $708,257, but increased slightly 0.46% from January 2006
* Sales price vs.listing price ratio increased slightly to 96.94% from December
* 15.3 months of inventory available at the end of January as compared to 7 in January 2006
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(These statistics are believed to be accurate but not guaranteed)

Here is an interesting stat: Current single family home residential listings priced $1M and over have increased 10.9% in the past year as compared to listings priced $600K and under which have increased a whopping 64.4%. Does this give you any indication of what is happening in our local market! Give me a call to take advantage of this market before it goes away. I would appreciate the opportunity to help you.

I hope you enjoy my monthly newsletter. Let me know if there are other facets of the market you would like additional information about or would like a comparative market analysis on your property.