SANTA CRUZ >> After months of lagging, the high end of the housing market has taken off in Santa Cruz County, with one in five homes in March sold for more than $1 million.
The median price — the midpoint of what sold — reached $749,000, the highest since August 2007, according to Gary Gangnes of Real Options Realty, who tracks the market.
Prices are just about where they were before the housing bubble burst.
Only twice in the past nine months did the median price top $700,000. Each time, homes selling for more than $1 million comprised at least 20 percent of the total sales.
BY the numbers
Close to the median
City of Santa Cruz
112 Lance Court, $735,000
305 King St., $749,000
710 Modesto Ave., $750,000
508 Western Drive, $755,000
109 Sunny Lane, $765,000
Santa Cruz County
9925 Love Creek Road, Ben Lomond, $730,000
219 Elva Drive, Rio del Mar, $745,000
2060 Day Valley Road, Aptos, $749,000
288 Crows Nest Drive, Boulder Creek, $759,000
205 Rancho Brazil Lane, Watsonville, $779,000
575 Bridge St., Watsonville, $243,500
590 Argos Circle, Watsonville, $249,000
612 Ester Way, Watsonville, $264,500
614 Bridge St., Watsonville, $277,000
649 Bronte Ave., Watsonville, $289,000
3 Bird Hill, Santa Cruz, $1.85 million
375 Henry Cowell Drive, Santa Cruz, $1.9 million
400 Seaview Drive, Rio del Mar, $2 million
625 Beach Drive, Rio del Mar, $2.05 million
707 Seacliff Drive, Seacliff, $2.15 million
Source: Real Option Realty
Sales in March were up despite the higher prices, with 141 single family homes changing hands, up 24 percent from a year ago.
Just 403 homes were listed for sale as of the first week in April, which Gangnes said was down 21 percent from a year ago and the fewest for that time of year in at least 18 years.
Of the 283 active listings, 37 percent are priced at more than $1 million.
“My God, right now, the shortage of listings, things get bid up and up and up,” said veteran Santa Cruz appraiser Glenn Fuller. “On the Westside, everything as selling $20,000 over what it was listed… Like a lake, everything’s risen up.”
In Pleasure Point, a walkable beach community that Fuller said is “very hot,” sellers are asking $1,099,000 for a 700-square-foot bungalow at 215 30th Ave. Built in 1938, it’s been updated with solar panels. The backyard has room to entertain, a hot tub and shower, and there are plans for an addition.
“We are taking offers as they come and we currently have three interested groups,” said broker Dale Friday, five days after the house went on the market.
Sellers of a 1,100-square-foot bungalow circa 1949 on an acre at 3522 Mission Drive, near Dominican Hospital, are asking $1,349,000, pointing out the zoning creates potential for development.
“We’re seeing multiple offers for homes over a million,” said Suzy Rodoni-Silverberg of 831 Real Estate, attributing the demand to the strength of the job market in Silicon Valley.
A survey last year by Civinomics of Santa Cruz commuters to Silicon Valley jobs found the average salary was $153,000, three times the median income of $54,000 in Santa Cruz County.
Rodoni-Silverberg has listed a property on Endlich Drive, a gated community off Glen Canyon Road, for $1,175,000.
Kevin Johnson-Santa Cruz Sentinel
Seller Mary Jo Rose, who works in high tech and has a passion for design, bought the home and guesthouse in August for $900,000 and invested her own funds in a transformation that took four months. She gutted rooms, installed hickory wood floors, picked out new paint, chose a new look for the kitchen cabinets, replaced a purple bidet bathroom with mauve fixtures and a curvy white tub, and took out the “Brady Bunch” fireplace to put in a modern see-through fireplace.
“This is her hobby,” said Rodoni-Silverberg, who has worked with Rose before. “She has a great eye.”
She expects the multiple offer trend to continue as buyers who are outbid keep on searching.
The difference between today and the bubble days of 2007, is “These are real buyers,” she said. “Before they couldn’t afford the homes they were buying.”
She doesn’t see any signs of a slowdown in Silicon Valley’s job market.
The median price in Santa Clara County in March was $939,000, according to MLSListings.
Compared to Cupertino and Saratoga, home prices here are “reasonable,” Fuller said.
He said he’s heard of 800-square-foot rentals commanding $2,000 a month.
“With rentals going like they have, these properties are becoming little cash cows,” he said. “It’s whatever the market will bear.”
Comparable sales push prices up. As prices rise, the homes put up for sale are compared with homes that has risen in value and list prices rise.
The evaporation of distressed properties push prices up. Homes foreclosed by a bank sell for less but there were only four such sales in March, none involving condos. CoreLogic reports the foreclosure rate for the county was .29 percent in February versus 1.43 nationally.
Low interest rates push prices up. When the cost to borrow is less, people are willing to pay more. Experts have been predicting a rise in interest rates but it has yet to materialize.
“Who want to pull the punch bowl, so to speak?” asked Fuller.