Real Estate 2011 and 2012
How was the market this past year and where is it going? A common refrain among Real Estate practioners in Santa Cruz, California and throughout the state. The past year went in several directions locally with slightly declining prices in most areas and slightly rising prices in a few others while the overall consensus among Realtors and consumers seems to be that there is a lack of "good" inventory in all price ranges. A lack of inventory typically translates to higher prices coming down the pike but in this atypical economy the only thing that's safe to venture is: Who really knows? Probably a little more shaking out to happen in terms of short sales and foreclosures before the market as a whole gets healthy. If you are a buyer, one of my esteemed colleagues, Norm Turner, put it rather succinctly the other day: "If you are a buyer, it's probably not a bad time to buy since prices are off about 40 percent and interest rates are at about half of what they were a few years ago." And if you really strip away all the "real estate talk" the market corrects itself, at least in the low-to-mid range (anything up to about $600K in our area) when investors can buy with a reasonable down payment (banks require a minimum of 25 percent down for non-owner occupied properties) and the property cash flows, or generally pays for itself. Some investors have abandoned stocks and bonds and sought a more reasonable return in real estate. It's probably not a bad idea to have at least some money in real estate, especially California Coastal real estate with restrictive building and development practices likely to continue. Large tracts of privately owned land are being purchased and placed into nature conservancies as well, which will further limit growth and increase the overall desireability of our area. Stay tuned. Here's to 2012!