Should I Buy A Home Now?

Are you eyeing a promising property in sought-after locales such as Capitola Village, California, Felton, or Soquel, among other charming small towns near Santa Cruz? Whether you're ready to sign on the dotted line or still mulling it over, the big question on your mind, probably, is "Is now the right time to buy or should I wait it out?

Mortgage rates continue to fluctuate while housing prices soar, a trend observed in bustling urban areas like Beachfront Santa Cruz and the City of Capitola, CA, and rural regions like Aptos and Pasatiempo. The National Association of Realtors (NAR) and Fannie Mae statistics aside. Are you ready to take action now, or are you joining others in holding off for now?

Home Purchase Sentiment Index: To Buy or Not to Buy

Purchasing a home is a significant decision that requires careful consideration of your financial status, industry trends, and personal goals. You need to consider the state of the property market right now and your situation and aspirations while making this critical decision.

Let's break this down since it's not as simple as selecting paint colors, at least according to the Home Purchase Sentiment Index (HPSI). This index was created by Fannie Mae, a government-sponsored enterprise, to assess consumer sentiment.

The HPSI is based on responses from the National Housing Survey, which explores people's perspectives on the housing market and homeownership. The index is structured similarly to a scorecard. A higher score usually suggests a more optimistic view, while a lower number implies the reverse.

Is This the Year to Make Moves In Santa Cruz?

Good news for everyone who has been scouring those long lists of Santa Cruz homes for sale and is determined to acquire a charming property in Santa Cruz or one of the lovely little communities nearby! The bottom line is that, compared to last year, we are seeing more reasonably priced homes getting to the market for sale. Thus, if you've had your eye on real estate in communities such as Soquel, Felton, Aptos, Scotts Valley, San Lorenzo Valley, Capitola, or Beachfront Santa Cruz and have been waiting for the right moment to act, now might be your chance!

Numbers Don’t Lie! The number of homes for sale on the MLS listings in the single-family category increased by 10.6% in February of this year alone compared to the same period in 2023. And here's the thing: there were a staggering 24% more houses on the market in the first two months of 2024 than in the same period in 2023. Listings in February were most active in Santa Cruz, Aptos, Boulder Creek, and Watsonville, CA, respectively.

Now, as we head into the spring home buying season, buyers will have more options, especially when it comes to snagging lower-priced homes. But, to keep it real, inventory isn't as plentiful as it used to be. Interesting tidbit: Did you know that the median sales price across the county in 2023 was 5.6% lower than in 2022?

Here's a quick overview of affordable places in the San Lorenzo Valley region: Boulder Creek averages $611,250, Ben Lomond comes in around $678,500, and Felton sits at $832,666.

Conversely, several neighborhoods in the area have top dollar values: the average price in Los Gatos Mountains is $1,636,833, in Scotts Valley, it is $1,623,766, and in Aptos, it is $1,554,375.

Regarding sales, pending and closed transactions indicate a rise in February, suggesting that buyer desire is picking up steam. Please pay special attention to those pending properties; they are an excellent way to predict where the market is headed.

Reasons You Should Buy NOW!

Are you eyeing a property close to one of the world's top golf clubs? Don't wait around – snatch up that dream property you spotted on the Pasatiempo homes for sale listing before it's snagged by someone else! Thus, yes, it may feel like a wild goose chase to discover your dream home, given the high cost and limited supply. But that's only a tiny portion of the whole picture.

That being said, why wait if you find a property that meets all your needs and won't break the bank, and you're prepared to move into homeownership and make this place your permanent home? Here are a few reasons why this is the ideal moment to do it!

Rates are declining If you're still dragging your feet about checking out ads for homes on the market in Los Gatos, San Lorenzo Valley, Felton, and other promising small towns near Santa Cruz, it's time to decide pronto. It appears that the anticipation of a cut to the benchmark interest rate by the Federal Reserve has already started to impact interest rates, causing them to drop in recent weeks. It's a huge relief, given that they were getting close to 8% by the end of 2023. The most recent Freddie Mac survey reveals that the mean rate on a 30-year fixed mortgage for the week ending of March 14 was 6.74%. While the rate is marginally higher than a year ago (6.60%), the trend toward declining rates is good news for homeowners. Many potential buyers may consider locking in a rate now to take advantage of these declining rates, especially if there is a concern that rates might increase again.

Additionally, you may be eligible for a special mortgage rate right now if this is your first time purchasing a house! It is called the FHFA (First-Time Home Buyer Mortgage Rate) Discount. This reduction could decrease the rate on your mortgage by up to 1.75 percentage points, enabling you to pay less in interest over time.

Furthermore, it applies to more than just one kind of mortgage. No, it works with all conventional mortgages, such as HomeReady, the Conventional 97, and Home Possible, which ordinarily require only a three percent down payment.

Prices are Climbing, Secure Your Spot Before it Escalates Further! Considering retiring in the home of "The Barn"? Don't hesitate – grab that affordable property you spotted and liked on the listings for homes for sale in Scotts Valley before it slips away to someone else!

According to the most recent analysis by the National Association of REALTORS (NAR), home prices are surging countrywide. There are far more people looking to purchase a home than available properties. Here are some of the key points from the report:

  • Most houses sell in less than a month on average.
  • Every state has roughly 19,600 houses up for sale on average.
  • Typically, properties in the $100,000–$250,000 range sell in just 24 days.

All of the houses featured on multiple listing service (MLS) real estate platforms would sell in just 90 days, according to the analysis, based on the current sales pace. A well-balanced market typically has a housing supply that lasts for six months. This indicates that there are more prospective purchasers than sellers and that we are in a seller's market.

In the current housing market, where demand outweighs supply in major towns across the US, those with homes for sale in Santa Cruz and attractive small towns near Santa Cruz hold the upper hand.

A Home is A Saving Plan No matter what additional barriers you face or how you view the process overall, remember that "forced savings"—implied in buying a property—contribute to the accumulation of long-term wealth. With each mortgage payment, you reduce the debt amount and increase your house's equity. You save passively instead of making the conscious effort necessary to transfer money to a savings account or stock portfolio. You'll have an asset under your name when the loan repayment marathon is over.

Build Wealth Through Ownership You know those rich guys, you see? The ones who seem to have it all? Well, many of them got there because they invested in real estate. So why not follow their example?

Buying a home is more than just a place to live; it's a prudent financial move for your future. Think about this: when you own your property, your housing bills are predictable. While your landlord may raise the rent anytime, your mortgage remains relatively fixed. The best thing is that, as you've already seen, you're boosting your savings as you pay down your mortgage. It is akin to putting your money into an ever-expanding piggy bank. .

Yet, homeownership has additional financial benefits beyond stability and equity accumulation. In addition, there are some significant tax benefits to homeownership. For example, homeowners can reduce their annual tax burden by qualifying for property taxes and mortgage interest deductions. Also, real estate ownership has the potential to increase wealth due to the long-term appreciation of property prices. Simply by hanging onto their property, homeowners stand to gain significant wealth as property values typically trend higher over time.

Grow With Your Neighbourhood Renting is a great alternative if you want to test the waters and experience living in Santa Cruz before making a long-term commitment. You may rent and yet have the freedom to experience various areas and lifestyles in Aptos, San Lorenzo Valley, Felton, Soquel, Scotts Valley, West Santa Cruz, City of Capitola, CA, and other neighboring small towns near Santa Cruz before deciding to settle down. This strategy can be ideal if you've recently moved to an unfamiliar place and are confused about your long-term goals, if you're planning a job change that may lead to another move, or if you expect significant changes in the composition of your household in the following years.

For those who intend to move later, buying now is undoubtedly the best decision. Being a local community member means more than just owning a home in the area; it means making a lasting impression and contributing to a more significant cause. Unlike when you rent an apartment, you're staying put and getting to know your neighbors, your neighborhood, and all the pleasant things that come with it.

Additionally, areas with a greater homeownership rate typically have lower crime rates, better property prices, and higher voter turnout. Additionally, neighbors may collaborate on projects like watching out for one another or organizing spectacular Fourth of July bike parades thanks to things like HOAs and internet networks like Nextdoor.

Even Harvard did this mega-study for 80 years and discovered that being part of a community is super essential for a long and healthy life. So, why not settle in, make friends, and stick around for a while?

These combined advantages highlighted the financial benefits of investing in homeownership as a strategic wealth-building venture. Please don't wait any longer; you never know when these opportunities will reoccur.

Posted by Paul Burrowes on


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