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A buyers, sellers market

Posted: Wednesday, Jan 4th, 2017

Tarmo Hannula/Register-Pajaronian file A sign from Fuentes Real Estate and Financial Services mark a home for sale in 2008 on Jefferson Street in Watsonville.

People seeking opportunity for home ownership despite rising prices

SANTA CRUZ COUNTY With rental rates on the rise, the housing market is seeing an abundance of interested buyers trying to break into home ownership.

But higher price points and a recent increase in interest rates is presenting challenges for those trying to qualify.

"The current trend that I am seeing right now is that there are a ton of buyers that are seeking the opportunity for home ownership and wanting to buy," said Tony Melo, a realtor with Aldina Real Estate. "The rising cost of rent is making it more challenging for people to save money for a down payment and closing costs, but I feel it has really put the spark in people to strap down with their finances to better save in order to buy."

This interest is met with the median active sale cost of $899,000 for a standard home, and while the Housing Authority offers some homeownership programs, they differ across cities for example, there are no options for programs in Watsonville, rather the Housing Authority notes the city offers its own housing assistance programs for city residents.

The Housing Authority website, in its description of the programs available for homebuyers, states "the Housing Authority is not currently administering any homebuyer programs for the County of Santa Cruz; however, the county does operate its own programs for unincorporated county area residents."

Cities that do receive assistance through programs at the Housing Authority include Capitola and Santa Cruz.

But despite the high cost, Melo said people are motivated to buy.

"I have met a lot of buyers recently that have came to me frustrated with rent increase notices and are now more motivated to move forward with getting pre-approved to buy a home," he said.

For active sales in Watsonville, the median price does offer buyers some relief, with the median price being $729,000.

And despite the now increasing interest rates, Melo said 2016 was a great year in real estate, with interest at "historically low" rates.

"The housing market is always exciting because there is an opportunity for everyone. Many first time home buyers are benefiting from first time home buyer programs and are getting their foot in the door with a low entry level down payment," he said "In addition to this, many investors from out of the area are beginning to flock more to our area to purchase as the rental market in Watsonville is very strong with high demand and great returns for their money."

Getting into 2017, Melo said buyers and sellers are also watching the political climate to see how the new presidency will affect the market.

"I predict the housing market will continue to remain strong especially if our new President-elect can create stability in the real estate market and economy as a whole in the first few months in office as President," Melo said. "Buyers and sellers that are currently sitting on the fence right now will then regain confidence to jump into the market and continue to drive values higher. The interest rates are predicted to rise within the next coming months and it will be interesting to see how the market reacts to this."

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