What’s Up With Capitola?

Many of us have been wondering “When would the housing crisis hit Capitola?”

If recent data is any indication, the answer may be “it has already come and gone”.

Our local housing market has had some significant fluctuations over the past two years:

• Median Sales Prices were above one million dollars in three different months in 2008, then fell to nearly $500,000 for several months in 2009.
• The number of homes for sale ballooned from just over 20 in December 2007 to a high of 60 in June 2009.
• Homes for sale versus homes sold, here and throughout Santa Cruz County, reached astonishing heights for most of 2008 and the first half of 2009.

But that was then.  This is now.  Since June of last year Capitola and a lot of Santa Cruz County has made a dramatic comeback!

• Median prices rose by around $250,000 for the six month period ending December 2009 – and this is only a slight decline from their recent high three months earlier!
• Inventory of unsold homes was cut in half over that same six month period and is still in decline – falling to near a historical low.
• The ratio of available homes to homes sold has also made a steady decline after showing a disturbing increase for almost a year prior to June.

That last statistic is the most significant.  A community can absorb only so many homes on the market at a time.  With a stable number of people looking to move into a community, an over supply will result in an erosion of prices.  While the number of homes for sale has decreased since June, the number of sales in Capitola have made a 150% gain over the previous two Decembers.

Clearly, Capitola was affected, as was every other community in California and the nation, by the housing crisis.  Fortunately, the effects may be neither severe nor long-term.

We will have to see improvements in employment figures and personal incomes in the Bay Area as a whole before we can expect to extend our current trends.

But there does seem to be a little light at the end of the tunnel.

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