February’s median price for single-family homes in Santa Cruz County, Calif., reached a new area record high of $937,000, according to Gary Gangnes of Real Options Realty, who tracks the numbers. The previous record was $935,100 in March 2018.
Gangnes said February had the lowest number of sales in 20 years, excluding 70 sales in 2008, which followed bank failures in late 2007.
The percentage of sales in the more affordable areas of San Lorenzo Valley and Watsonville was only 19%, which resulted in a higher median price than a typical February, according to Gangnes. He said a typical February has 28 percent to 30 percent of sales in those areas.
Buyers have backed off in the last three months during a jump in interest rates, a sharp stock market drop and a general lack of affordable houses, according to the San Francisco Chronicle.
The housing market also saw some big changes during the last week of March.
Mortgage rates had the biggest one-week drop in a decade, according to the Federal Home Loan Mortgage Corp. better known as Freddie Mac.
The average 30-year fixed mortgage rate dropped to 4.06% for the week ending on March 28, according to Freddie Mac. The week previous, it averaged 4.28% and was at 4.4% a year ago, according to CNBC.
“The Federal Reserve’s concern about the prospects for slowing economic growth caused investor jitters to drive down mortgage rates by the largest amount in over 10 years,” said Sam Khater, Freddie Mac’s chief economist in the CNBC article.
The Federal Reserve said it wasn’t going to raise rates until the end of the year, said broker and owner Paul Bailey of Santa Cruz’ Bailey Properties.
“A lower rate allows more people to buy,” he said.
The Federal Reserve said it will purchase mortgage bonds, and other nations are starting to invest in the U.S. mortgage market, according to Sereno Group Broker Associate Ruth Bates. She said the more people there are buying, the more rates will become competitive and go down.
High mortgage rates and a bumpy stock market late last year slowed home sales, CoreLogic analyst Andrew LePage told the East Bay Times. LePage also said that a recent drop in rates and more homes for sale could lead to a rebound in sales.
The median price for condominiums and townhouses was $599,000 in February, according to Gangnes. It was $600,000 in February 2018.
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