Displayed here is a graph (and table - for those who like to look at numbers rather than trends,) of the Median Home Price in the Santa Cruz County area from 2010 through 2013. We've seen the usual seasonal fluctuations through the years; higher prices in the summer months and lower in the winter months. The overall trend, however, has been in the upward direction. 2013 in particular seems to have signaled a definitive upward climb of the median price.
The area has experienced low inventory combined with low interest rates for the past 2 years. The simple economics of supply and demand and the low rate of borrowing, has resulted in the prices climbing.
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| Median Home Price, Santa Cruz County, 2010-2013 |
What
should we expect in 2014? In the short run, the pending sales index
suggests that sales of existing homes will remain at the current levels
through the end of the first quarter. Although the price jumped in January, this could be the starting point for the year and assuming that the economy will
have a decent growth in 2014, the housing market should be stronger for
the last 3 quarters of 2014.
Housing affordability will
remain an issue in 2014, especially in the Bay Area where prices rose
precipitously over the last couple of years and, unlike the rest of the
state, have not yet slowed down. When affordability butts up against rising prices, the result could be an even market.
It would be nice to see things level rather than the feast or famine of the last 10 years.
