Santa Cruz
Santa Cruz County median home price dips, as area is among hardest hit by tax law changes
By Jondi Gumz, Santa Cruz Sentinel
http://www.santacruzsentinel.com/business/20180309/santa-cruz-county-median-home-price-dips-as-area-is-among-hardest-hit-by-tax-law-changes
MARCH 9, 2018, SANTA CRUZ >> Andy Manzi is looking to buy a bigger home, one with space for his 4-year-old daughter’s toys and room for the grandparents to visit — ideally in Boulder Creek, where his family lives now.
Manzi, 52, a hardware engineer, said $750,000 is realistically what he expects to pay but so far, nothing meets the family’s criteria.
“Definitely the market’s a little thin,” he said Friday.
Check MLSlistings.com in the $600,000 to $800,000 range for Boulder Creek and only 10 homes are available.
Real estate information company Trulia calls it “homebuyer gridlock,” a nationwide phenomenon resulting from higher prices squeezing out move-up buyers, first-time buyers seeing nothing in their price range and cash buyers holding onto lucrative rental properties.
The number of homes for sale in Santa Cruz County is historically low.
As of the first week in February, there were 247 single-family homes listed for sale, the fewest for that month in 22 years, according to Gary Gangnes of Real Options Realty in Aptos, who tracks the numbers.
The median price for January, the midpoint of 114 sales, was $787,000 — dipping below $800,000 for the first time in 15 months.
The percentage of sales for homes more than $1 million was 28 percent, the lowest since April, and the percentage of sales in San Lorenzo Valley and Watsonville was 34 percent, the second highest in 14 months, according to Gangnes.
CONDO RECORD
The median price for condos jumped to $634,500, an all-time high, on 33 sales in January, and just 58 condos were listed for sale the first week of February, the fewest for that months in 22 years.
Living in the mountains, Manzi knows some roads are better than others. Some roads are awaiting repair after Boulder Creek was hard hit by winter storms a year ago. Manzi also noticed some homes have square footage not listed in the ads, which can be due to unpermitted additions.
Santa Cruz County is among the counties in the nation hardest hit by the tax law change approved in December to limit mortgage interest deductions to the $750,000 in home loans, down from $1 million, according to Apartment List, an online company listing rentals nationwide.
TAX LAW CHANGES
Apartment List projected the median cut in deductions to be $4,300 a year for Santa Cruz County, adding up to $129,000 over a 30-year mortgage, San Francisco-Oakland, losing $5,400 a year in deductions and San Jose-Santa Clara-Sunnyvale losing $5,400, while the impact in Houston, Phoenix and Las Vegas was expected to be $0.
Seb Frey of Realty World Virtuoso in Capitola sees an impact locally,
“It is definitely giving buyers pause, especially those looking at higher-end properties at $750,000 or over,” he said. “I find people are more skittish this year than they were a year ago.”
He added, “It’s not just the tax consequences but mortgage rates are also higher. I feel there is more pullback from buyers and less of a feeling they should be super-aggressive when it comes to how much they’ll offer.”
‘A HUGE HIT’
Santa Cruz attorney Nicole Adkison, who has a graduate degree in taxation, sees major disincentives for homeowners to sell.
If you bought your house 10 to 20 years ago, you are locked into property taxes based on the purchase price plus a two percent increase because of Proposition 13, she pointed out, adding, “Your real estate taxes will go up when you buy a new place because it gets reassessed.”
So instead of paying $5,000 in property taxes, you could be paying $15,000, and one of the tax law changes capped the deduction for state and local taxes at $10,000.
“That is a huge hit,” she said.
INTEREST RATES
Manzi said he will try to save more money so he can make a bigger down payment, which could downsize monthly payments to compensate for higher interest rates.
He could sell his current home to put toward the new one, but he’s thinking of using it as a rental.
“That would be the preferred strategy,” he said.
JANUARY 2018 STATISTICS
CLOSE TO THE MEDIAN
City of Santa Cruz:
237 Union St., $700,000
211 Stanford Ave., $780,000
136 Wendell St., $790,000
Santa Cruz County:
1900 Kinsley St., Live Oak, $780,000
1121 Lost Acre Drive, Felton, $784,000
150 Siesta Drive, Aptos, $805,000
Highest:
105 Manor Place, Santa Cruz, $2.3M
596 Henry Cowell Drive, Santa Cruz, $2.295M
161 St. Andrews Drive, Rio del Mar, $1.796M
Lowest:
710 Primavera Road, Boulder Creek, $265,000
560 River Drive, Boulder Creek, $306,000
113 California, Watsonville, $318,000
Source: Real Options Realty
Single-family homes:
Median price: $787,000 ($810,000 a year ago; $694,500 in 2016)
Listings: 247 (263 a year ago; 250 in 2016)
Sales volume: 114 (115 a year ago; 96 in 2016)
Distressed: 1 bank-owned; 2 short sale
Average price: $858,940 ($861,675 a year ago)
Condos:
Median price: $637,500 ($486,000 a year ago; $529,000 in 2016)
Listings: 58 (68 a year ago; 73 in 2016)
Sales volume: 33 (38 a year ago; 25 in 2016)
Distressed: 0 bank-owned; 0 short sales
Average price: $650,410* ($529,513 a year ago)
Source: Real Options Realty
CLOSE TO THE MEDIAN
City of Santa Cruz:
237 Union St., $700,000
211 Stanford Ave., $780,000
136 Wendell St., $790,000
Santa Cruz County:
1900 Kinsley St., Live Oak, $780,000
1121 Lost Acre Drive, Felton, $784,000
150 Siesta Drive, Aptos, $805,000
Highest:
105 Manor Place, Santa Cruz, $2.3M
596 Henry Cowell Drive, Santa Cruz, $2.295M
161 St. Andrews Drive, Rio del Mar, $1.796M
Lowest:
710 Primavera Road, Boulder Creek, $265,000
560 River Drive, Boulder Creek, $306,000
113 California, Watsonville, $318,000
Source: Real Options Realty
Rising Rents In Santa Cruz Inspire Rent Control Push
By Ericka Mahoney, KAZU.org
http://kazu.org/post/rising-rents-santa-cruz-inspire-rent-control-push#stream/0
December 5, 2017, SANTA CRUZ >> The majority of people living in Santa Cruz are renters. But high rents are driving some of them out. One homeowner is leading an effort to change that. Josh Brahinsky just became a homeowner. He lives on a tree-lined block in Santa Cruz with his wife, two boys, and their dog. But they also live with a tenant. The family rents out a bedroom. And they plan to bring in more people by converting their garage into an apartment.
“We can’t afford the mortgage if we don’t also share the space, but we also want to create homes for our friends. Like
everybody is getting booted out of town,” says Brahinsky. As a contractor builds the new door frame, Brahinsky says his friends and neighbors are getting priced out. According to the real estate website Zillow, rents are growing at an aggressive rate in Santa Cruz, about twice the national average. The median rent is roughly $3,200 a month. That’s almost as much as San Jose.
Brahinsky says they will keep the rent on their new garage apartment affordable for whoever moves in. But he wants to help even more people. He’s an active member of the local group Movement for Housing Justice, which is affiliated with Tenants Together, a statewide group. Movement for Housing Justice is leading a campaign to establish rent control. Rent control limits how much a landlord can raise the rent. Right now in Santa Cruz, landlords can do whatever they want. “We have hundreds of people signed up already to gather signatures. The minute we said we are doing this, everyone was like how can I help, how can I help?” Brahinsky says.
Fourteen cities in California currently have rent control. Brahinsky hopes Santa Cruz voters pass it next November. The Santa Cruz measure proposes tying the allowable increase to the increase in the cost of living. It also proposes just cause eviction. Meaning a landlord would have to provide a reason when they evict someone. He and other advocates will start collecting signatures in January to get it on the ballot.
Tracy Cone says she will definitely add her name to that list. She rents her home with her boyfriend and children. And she rents her office. Her biggest fear is dramatic increases in both. “I don’t think I could sustain those in terms of my income, my income doesn’t, won’t match that,” Cone says. Cone is a self-employed acupuncturist. “I’m paying more than 50 percent of my income toward rent. And it’s at the point where it’s difficult to save enough money to be able to buy something. You know the hope of doing that is diminishing every month. And so now I’m thinking, like, I don’t know how I’m going to stay here. I may just have to suck it up and go start a practice somewhere else, where I can afford to live,” says Cone.
She says, unfortunately, rent control would not help her. That’s because it doesn’t apply to commercial units for her office and because she lives in a single-family house. A California law called Costa-Hawkins bans rent control on single-family houses, condos, and all homes built after 1995. That means about 77 percent of Santa Cruz’s housing stock would not be eligible for rent control.
But it’s still a problem for landlord Darius Mohsenin. Rent control would affect every unit he owns in Santa Cruz. “Santa Cruz total, 53 units, spread across five buildings,” says Mohsenin. Standing in front of one of those buildings on Broadway, he says rent control would discourage him from doing upgrades. He points to the double-pane vinyl windows he put in a few years ago. It cost him $20,000. “I would go and put my money in places in Salinas or other towns I have properties in, San Leandro, Vacaville. Because I just wouldn’t see a way to recoup my investment under a rent control initiative,” Mohsenin says.
The second reason has to do with Costa-Hawkins, that state law which dictates how cities implement rent control. It gives landlords the right to raise the rent as much as they want in between tenants. “It only benefits one group of people, the current tenant base, that’s it,” Mohsenin says. But Homeowner Josh Brahinsky says rent control is about protecting the people who live in Santa Cruz now.
“It’s not a perfect system. It’s not going to make everything great. But it does mean that a substantial number of units will have the rent limit and that’s going to make a big impact on the community because those people will stay here,” says Brahinsky.
Santa Cruz residents could vote on rent control next November. There’s also a statewide effort to repeal Costa-Hawkins, which could go before voters on that same ballot. On Tuesday night, Santa Cruz City Council will be discussing housing issues. The meeting starts at 7:00 at City Hall
High-speed Gigabit internet being offered to downtown Santa Cruz residents & businesses
Cruzio Internet and Santa Cruz Fiber partnering to bring fiber internet to downtown starting in October
by Maggie Barr, Keller Williams Santa Cruz
October 5, 2017, Santa Cruz, CA – Work is scheduled to start this month on Cruzio Internet/Santa Cruz Fiber’s downtown fiber optic network. Buildings located in the first build area (see map inset), have a once-in-a-lifetime opportunity to connect it to this new network at no cost. All the property manager or building owner needs to do is fill out a simple access agreement on Cruzio’s website at cruzio.com/terms-use/access-agreement. Cruzio will reach out to interested participants to coordinate installations.
Without an Access Agreement signed Cruzio cannot engineer to a particular building as part of the first fiber construction. Re-engineering a connection later will bring with it additional costs for the building owner or manager.
This new infrastructure will immediately increase the value of any building that is connected as a result of this free build. Any building that is connected will have access to internet speeds that are ten times faster than what is currently available within the City.
Internet speeds are quickly becoming a make or break point for many commercial and residential deals, and this will give your clients the edge in attracting new customers and tenants.
In other areas of the county, Fiber companies like Santa Cruz Fiber are deploying gigabit broadband to multi-tenant and single-tenant buildings using high-powered, point-to-point wireless. This is the same technology Google Fiber has pivoted to, and that Facebook and others technology providers are investigating.
Cruzio is asking Real Estate agents and Property Managers in Santa Cruz to help spread the word about high-speed internet coming to Santa Cruz.
Contact the project lead, Robert Singleton, via phone or email with inquiries: 707.569.4546, robert@civinomics.com.
Santa Cruz County median home price reaches record $875,000 in May
As Santa Cruz County home values escalate, sales volume retreats; a fixer for $574,000
by Jondi Gumz, The Santa Cruz Sentinel
Published June 26, 2017
6/26/17, Santa Cruz, CA – Prices of single-family homes in Santa Cruz County soared to new records in May as the number of sales shrank. The median price, the midpoint of what sold during the month, was $875,000, topping the previous high of $830,000 in April, according to Gary Gangnes of Real Options Realty, who tracks the numbers. The average price, which tends to be higher than the median because of expensive oceanfront homes, reached a record $982,670.
Just 126 homes sold, down 23 percent from a year ago, repeating a pattern from March and April. Sales are nearly down to post-crash levels of 2011. Listings are down by half compared to 2011 when many distressed properties were for sale. Of May’s active listings, 51 percent are asking more than $1 million. “A jump of $45,000 in one month seems to indicate a spike,” Gangnes said, but he also noted the “unsold inventory index,” which shows how long it would take to deplete the inventory of homes for sale at the current sales rate has been below normal for more than five years, pressuring values upward.
Paul Bailey, co-owner of Bailey Properties, who’s spent more than 40 years in real estate, said he would not be surprised if the median price reaches $1 million in three years. There aren’t enough homes for sale to meet demand. That’s partly due to lack of construction but also due to baby boomer homeowners reluctant to sell and downsize to a smaller nest. For a couple whose home is worth over $500,000 more than when they bought it — a realistic scenario locally — selling brings financial disadvantages. That includes paying capital gains tax and giving up a low mortgage interest rate, Bailey noted.
Then there’s the problem of buying a replacement home. Say you’re 70, your mortgage is paid, and the home you bought for $300,000 is now worth $1.5 million. “You want to buy under $950,000, that’s where everyone wants to buy,” said Tom Brezsny, an agent with Sereno Group. “There’s a stuckness and no easy solution.” Starter homes are nearly extinct, and the “low end” is more expensive than it was. Buying a $600,000 home means laying $2,924 per month for a 30-year mortgage at 3.81 percent, property taxes and insurance.
Checking MLSListings.com Monday for homes for under $600,000 turned up:
- A tiny 464-square-foot home at 116 Walk Circle, Santa Cruz, built in 1930, listed at $550,000.
- A 735-square foot cabin at 750 Encino Drive, Aptos, listed at $545,000 plus monthly road fees.
- A red-tagged property with two cabins at 2472 Fanning Grade in Ben Lomond, asking $574,000.
“People are afraid they won’t have a place to go,” said Sue Seeger, an agent with David Lyng Real Estate. As prices have risen, Brezsny has seen sellers confident they will get their asking price and buyers being more selective. “Buyers are pushing back,” he said. Bailey said Highway 1 traffic is keeping prices in Aptos 10-15 percent below those on the Santa Cruz Westside or Scotts Valley for people commuting on Highway 17 to Silicon Valley. The drive to Aptos is shorter, he added, for software developers recruited by Amazon’s Santa Cruz office and doctors recruited by Kaiser Permanente.“We need workforce housing,” Bailey said. “We’re pushing our workforce south.”
In May, the local home fetching the highest price — $3.675 million — was 3000 Pleasure Point Drive. It was on the market for more than a year, and the seller initially asked $4.385 million. In contrast, the seller of a four-bedroom home at 917 King St. on Westside Santa Cruz asked $849,000 and got $880,000. Seeger, who represented the seller, said, “There are multiple offers if the house is priced right.” She said June has been slow, which she attributes to graduations and vacations.
MAY 2017 STATISTICS
Single-family homes
Median price: $875,000 ($805,000 a year ago; $700,000 in 2015; $675,000 in 2014; $625,000 in 2013; $497,500 in 2012; $435,000 in 2011)
Listings: 484 (514 a year ago; 529 in 2015; 662 in 2014; 633 in 2013; 823 in 2012; 990 in 2011)
Number of sales: 126 (163 a year ago; 183 in 2015; 171 in 2014; 221 in 2013; 212 in 2012, 138 in 2011)
Distressed: Bank-owned, 2; short sales, 1
Unsold Inventory Index: 3.8 months (3.2 months a year ago)
Average price: $982,670 ($896,452 a year ago)
Condos
Median price: $570,000 ($532,500 a year ago; $470,000 in 2015; $404,250 in 2014; $343,750 in 2013; $265,000 in 2012; $292,500 in 2011)
Listings: 108 (102 a year ago; 123 in 2015; 141 in 2014; 171 in 2013; 244 in 2012; 296 in 2011)
Number of sales: 48 (44 a year ago; 52 in 2015; 44 in 2014; 56 in 2013; 53 in 2012; 30 in 2011)
Distressed: Bank-owned, 0; short sales, 0
Unsold Inventory Index: 2.3 months (2.3 months a year ago)
Average price: $579,740 ($548,707 a year ago)
Source: Real Options Realty
CLOSE TO THE MEDIAN
City of Santa Cruz
201 Beachview Ave., $870,000
107 Robinson Lane, $875,000
917 King St., $880,000
204 Center St., $880,000
220 Kenneth St., $885,000
Santa Cruz County
4465 Portola Drive, Live Oak, $865,000
1459 30th Ave., Live Oak, $865,000
17390 Tressel Pass Road, Boulder Creek, $875,000
1825 Early Drive, Felton, $890,000
875 Calabasas Road, Watsonville, $895,000
Highest
986 Via Tornasol, Rio Del Mar, $2.495M
505 Aptos Creek Road, Aptos, $2.525M
200 16th Ave., Live Oak, $2.625M
1016 West Cliff Drive, Santa Cruz, $3.15M
3000 Pleasure Point Drive, Pleasure Point, $3.675M
Lowest
9571 E. Zayante Road, Lompico, $180,000
234 Acorn Drive, Boulder Creek, $295,000
671 Bronte Ave., Watsonville, $295,000
411A Madison St., Watsonville, $355,000
407 Spruce Circle, Watsonville, $380,000
Source: Real Options Realty
Santa Cruz County median home price $675,000 in May, highest since February 2008
By by Jondi Gumz, Santa Cruz Sentinel
Listings rise in May after 39 months of declines; more sales top $1 million
Wednesday, June 25, 2014, Santa Cruz, CA –
The reluctant seller syndrome, which has gripped Santa Cruz County housing market for three years, may be moving on.
Here are key metrics for May.
For the first time in 39 months, listings of single-family homes rose compared to a year ago, increasing from 633 to 662, up 4.6 percent, according to Gary Gangnes of Real Options Realty, who tracks the numbers.
The median price, the midpoint of what sold, was $675,000. The May median was the highest since February 2008, the year of the crash.
Sales were slower compared to a year ago, but of those 171 sales, 33 were for more than $1 million — 19 percent.
Only 7 percent of the sales involved distressed property, foreclosed by a lender or a “short” sale for less than the mortgage; of 44 condo sales, there were no bank sales and only one short sale.
Four homes sold for the same price: $685,000.
The stories behind those sales illustrate some of the trends in the market.
“If it’s a good property, people should come in and make offer immediately or it’s gone,”said Jerry Smeltzer of American Dream Realty, an agent with 37 years in the business.
He represented the seller of 674 Mountain View Drive in Ben Lomond, which sold before it could be listed.
Zillow described three-bedroom, three-bath home as custom-built, mostly new construction, all with permits; it sold for $639,500 in 2012.
Smeltzer said he went to see Jayson Madani, an agent who specializes in San Lorenzo Valley homes.
“He goes ‘Sold,'” said Smeltzer. “We got the deal done quickly.”
Smeltzer said his clients have made offers greater than the asking price, but were outbid.
“That’s tells a lot about what the market is doing,” he said.
A three-bedroom, two-bath home at 609 Monterey Ave. in Capitola was snapped up in nine days, sold for the asking price.
The location, close to the village and across from New Brighton Middle School, was perfect for the young family who got it over two others making offers.
“They wrote a letter that was heartwarming,” said Don O’Regan, an agent with Thunderbird Real Estate representing the sellers, who “liked the idea of a young family moving in and building their own memories.”
That soft touch can help buyers competing against all-cash offers.
O’Regan said the asking price for the 50-year-old house was a little less than those of the comparable sales because it needed some work.
A three-bedroom, 2.5-bath home at 100 Hare Way on the Boulder Creek Country Club Golf Course found a buyer in 15 days, with the sale price $6,000 greater than the list price. With a gourmet kitchen, wet bar and hot tub, it was move-in ready.
Century 21 agent Shanne Carvalho, who represented the seller, favors making repairs and staging a home.
He has three storage units of furniture to help a house look its best.
“It’s been really effective,” said Carvalho, who sold a home at 250 Lake Drive in Boulder Creek in May after replacing the carpet and flooring.
He sees would-be sellers holding back, worried they won’t find a replacement home but this puts them at a disadvantage.
“Sellers are not taking contingent offers,” he said.
His strategy: Sell first, get the cash, and avoid having to make an offer contingent on selling your current home.
Or sell stock, which is what two of Carvalho’s buyers did.
“I’m a little bit of a gambling man,” Carvalho said. “You’ve got to jump in head first. Worst case, you’re renting.”
His downsizing clients listed their home in Soquel for $999,000 and plan to close the deal next week for $1,010,000. They are looking for a single-level home.
Wondering what happened to the homes sold by banks?
In the case of 2029 Koopmans Ave., a three-bedroom, two-bath home in Live Oak, an investor bought it after foreclosure a year ago.
Zillow described it as “beautifully remodeled craftsman style home.”
Noelle Charles-Merrill, agent with Accurate Signature Properties in Discovery Bay said an investor who knows tradespeople in tile work, carpentry and painting can complete a remodel more readily than a new buyer lacing those connections.
“You never know what you’re getting when you buy a bank-owned property,” she said. “You have to have a skilled eye.”
The remodel was listed at $679,950, attracted multiple offers and sold in 18 days for more than the asking price.
Still, prices are not quite where they were before the crash — this home sold in 2005 for $720,000.
Sold for $685,000
609 Monterey Ave., Capitola. 1,299 square feet. Sold for asking price. Pending in 9 days.
100 Hare Way, Boulder Creek. 2,100 square feet. Listed at $679,000. Pending in 15 days.
2029 Koopmans Ave., Live Oak. 1,202 square feet. Listed at $679,500. Pending in 18 days.
674 Mountain View Drive, Ben Lomond. 2,130 square feet. Sold before it could be listed.
Source: Real Options Realty, Zillow.com.
May 2014 statistics
Single-family homes
Median price: $675,000 ($625,000 a year ago; $497,500 in 2012; $435,000 in 2011, $535,000 in 2010).
Listings: 662 (633 a year ago; 823 in 2012; 990 in 2011; 1,026 in 2010)
Number of sales: 171 (221 a year ago, 212 in 2012, 138 in 2011; 160 in 2010)
Distressed: Bank-owned, 3, short sales, 9
Unsold Inventory Index: 3.9 months (2.9 months a year ago; 3.9 months a year ago; 7.2 months in 2011, 6.4 months in 2010)
Average price: $786,420 ($649,875 a year ago)
Condos
Median price: $404,250 ($343,750 a year ago; $265,000 in 2012; $292,500 in 2011; $330,000 in 2010)
Listings: 141 (171 a year ago; 244 in 2012; 296 in 2011, 264 in 2010)
Number of sales: 44 (56 a year ago; 53 in 2012; 30 in 2011, 30 in 2010)
Distressed: Bank-owned, 0, short sales, 1
Unsold Inventory Index: 3.2 months (3.1 months a year ago; 4.6 months a year ago, 9.9 months in 2011, 8.8 months in 2010)
Average price: $488,538 ($375,833 a year ago).
Source: www.ror.com
Close to the median
City of Santa Cruz
215 Dufour St., $625,000
164 Rankin St., $630,000
345 Market St., $645,000
119 Blackburn St., $662,500
120 Elk St., $675,000
208 Blackburn St., $725,000
Santa Cruz County
1430 Checola Court, Live Oak, $670,000
500 Thomson Lane, Scotts Valley, $673,000
250 Lake Drive, Boulder Creek, $679,000
247 North Ave., Seacliff, $684,000
Lowest
10825 Creekwood Drive, Lompico, $209,900
415 Fairview Ave., Boulder Creek, $225,000
156 Santa Clara St., Watsonville, $250,000
261 Manfre Road, Watsonville, $250,000
604 Delta Way, Watsonville, $255,000
Highest
339 Beach Drive, Rio Del Mar, $2.07 million
317 Kingsbury Drive, Rio Del Mar, $2.099 million
910 Via Gaviota, Rio Del Mar, $3 million
61 Avocet Circle, La Selva Beach, $3.6 million
100 Geoffroy Drive, Live Oak, $3.85 million
Source: http://www.contracostatimes.com/california/ci_26026912/santa-cruz-county-median-home-price-675-000
Santa Cruz Real Estate News 