December is known to be slow for home sales, but this time around it was a banner month.
Sales of single-family homes in Santa Cruz County jumped to 166 up from 122 a year ago, with the median price at $828,000, up from $805,000 a year ago, according to Gary Gangnes of Real Options Realty, who tracks the numbers.
Buyers were drawn to more affordable areas, with 34% of sales in San Lorenzo Valley and Watsonville — the highest percentage in 13 months.
Sales of homes for $1 million or more dropped to 29.5% — the lowest since May.
As of the first week of January, for sale listings were the fewest in 22 years, and the unsold inventory index was 1.5 months, indicating how long it would take to sell the listed homes at the current sales rate.
Seven homes acquired by lenders via foreclosure were sold, the most for any month in 2017. These distress sales had dwindled to a trickle this year as home prices set new records last year; they had been a prominent part of the market, offering buyers discounts, after the 2008 housing crash.
Much of the pressure on the housing market in Santa Cruz County is coming from Silicon Valley.
In Santa Clara County, home to Apple's spanking new headquarters in Sunnyvale, the median home price jumped in December to $1.3 million — a stretch even for highly paid tech workers -- making the drive to Santa Cruz County look attractive.
Was tax reform a factor?
In case you've forgotten, the House of Representatives passed a tax bill Nov. 16 and the Senate passed its version on Dec. 2, with Republicans calling this tax reform historic, the first overhaul since 1986.
"If I had to guess why December sales were so much stronger than the previous year, I'd put it down to consumer confidence," said real estate broker and blogger Seb Frey of Realty World Virtuoso in Aptos.
"The job market is very strong, real wages are rising, and the stock market is on a tear, or it was, anyway," he said. "It will be interesting to see what the February numbers look like given the volatility we are seeing in the stock market."
According to his data, January home buying in Santa Cruz County settled back to 116 sales, about the same as the year before, with the median price below $800,000.
The December buying frenzy in Santa Clara County resulted in single-family homes selling in an average of nine days, which is quick, according to the California Association of Realtors, compared to 21 days in Santa Cruz County, which was down from 30 days the year before.
For example, a two-bedroom 800-square foot home on Grandview Avenue in the Mount Hermon neighborhood, one of the more affordable areas, sold in December for $392,500. The house went into contract in 11 days.
Near West Cliff Drive, a 2,900-square-foot home on Manor Place was listed Dec. 3 and went into contract in nine days; the price at the closing in January was $2.3 million.
Zillow described it as "a very lucrative vacation rental that is booked very solid throughout the year," renting in the summer for $850 a night or $5,000 a week.
The West Cliff Drive area, with its ocean vistas, is popular with visitors.
Santa Cruz County as a whole is attractive to buyers seeking a vacation home, and December was bone-dry, with none of the drenchings and power outages that make shopping for a home a challenge in the winter.
In December, 24.9% of all homes including condos sold in Santa Cruz County were purchased by absentee buyers, up from 23.9% in November and down from 29.4% in December 2016, according to Andrew LePage of CoreLogic, which tracks property data.
Absentee buyers include investors and buyers of vacation homes or second homes, with the property tax bill going to a different address.
Tribune Content Agency