APRIL/MAY 2011

Inside This Issue

Susan Strouse, B.S., M.A.
Strouse Realty Group American Dream Realty 5522 Scotts Valley Dr. Scotts Valley, CA 95066 (831) 338-6481 Susan@StrouseRealtyGroup.com http://www.StrouseRealtyGroup.com
DRE #01228878

> LOCAL MARKET TRENDS ..................... 1 > MORTGAGE RATE OUTLOOK ............... 2 > HOME STATISTICS .............................. 2 > FORECLOSURE STATS ........................ 3 > CONDO STATISTICS ............................ 3 > ANNUAL TABLES ................................. 4

The Real Estate Report
local market trends
SANTA CRUZ COUNTY
Trends at a Glance

Home Sales Up Third Month in a Row
Sales of single-family, re-sale homes were up in MORE STATISTICS… March, year-over-year, for the third month in a row: Year-over-year, home inventory was up for the 41.5%. tenth month in a row: 1.9%. The median price for single-family, re-sale homes in Santa Cruz County was down 9.4% year-overyear, while the average price declined 17.6%. The sales price to list price ratio turned around last month and gained 1.4 points to 97.8%. Pending sales were off for the eighth month in a row: 4.3%.

(Single-f amily Homes) Mar 11 Feb 11 Mar 10 Median Price: $ 480,000 $ 459,900 $ 530,000 Av erage Price: $ 534,374 $ 619,199 $ 648,201 Units Sold: 167 95 118 Inv entory : 580 560 569 Sale/List Price Ratio: 97.8% 96.4% 97.9% Day s on Market: 101 94 72 Day s of Inv entory 104 159 144

SALES MOMENTUM…

although still negative, started trending upward last All these statistics are year-over-year. month and is now at –9%.

IN THE CONDO MARKET… Our momentum stats are calculated using a 12month moving average to eliminate seasonality. By the median price was down 31.1% year-over-year. comparing this year’s 12-month moving average to Condos sales were up 3.6% year-over-year. last year’s, we get a percentage showing market Pending sales were down for the seventh month in momentum. a row year-over-year: 20%. PENDING MOMENTUM…
a harbinger of future sales, while still positive, has been trending downward. Last month the number was +1%, a decline from +4% the month before. Inventory, on the other hand, increased for the tenth month in a row: up 29.5% year-over-year. Remember, the real estate market is a matter of neighborhoods and houses. No two are the same. For complete information on a particular neighborhood or property, call.

PRICING MOMENTUM…
after peaking at +12% last August, has also been trending downward and is now at 0%.

Santa Cruz County Homes: Sales Momentum
60.0% 40.0% 20.0% 0.0% 0 FMAMJ JA SOND0 FMAMJ JA SOND0 FMAMJ JA SOND0 FMAMJ JA SOND1 FMAMJ JA SOND1 FM -20.0% 6 7 8 9 0 1 -40.0% -60.0% Sales Pending Median © 2010 rereport.com

Susan Strouse, B.S., M.A. | Susan@StrouseRealtyGroup.com | (831) 338-6481

The Real Estate Report

Mortgage Rate Outlook
30-Year Fixed Mortgage Rates
01-11 10-10 07-10 04-10 01-10 10-09 07-09 04-09 01-09 10-08 07-08 04-08 01-08 10-07 07-07 04-07 01-07 10-06 07-06 04-06 01-06 10-05 07-05 04-05 01-05 3.0%

May 1, 2011 -- The economy is starting to show some additional signs of an expanding recovery, and one more resilient to external shocks. That said, many challenges to overcome still remain before we get to a "full recovery", and if consumer moods are any indication, rising gasoline prices are starting to create some considerable headwinds.

As the glass begins to seem more likely to be half full than empty, the likelihood is that interest rates will tend to be somewhat higher on balance than lower. A stock market finding its footing is one expression of that as money moved more confidently into risk and away from safety. Concerned about risk, the Federal Reserve and other regulators released for comment and feedback a paper to address financial risk. Ultimately this will include a definition of a Qualified Residential Mortgage, expected to be a risk-free item indeed, requiring borrowers to have a deep equity position and great credit, among other risk-controlling features. Eventually, the QRM will be the only loan bundled into securities with no loss reserves held back by the issuer or originator. In theory, a narrow definition will expand the number of borrowers who fall outside the boundaries, and that audience should be large enough as to attract a response from lenders eager to lend money. However, it is by no means clear at this moment whether a more robust market for nonQRM mortgages will form, or if the market will go the other way, originating only (or mostly) QRM-level mortgages, sharply limiting the availability of credit to only the best possible borrowers.

HSH.com's overall mortgage tracker -- our weekly Fixed-Rate Mortgage Indicator (FRMI) -- found that the average rate for 30-year fixed-rate mortgages rose by six basis points (.06%) to finish the week at 5.17%. A key component of the first-time homebuyer market, FHA-backed 30-year fixed-rate mortgages increased by five basis points to land at 4.81%. ARMs are starting to regain some favor in the market, and Hybrid 5/1 ARMs, perhaps the most preferred alternative to the traditional 30-year FRM (notably for jumbo buyers) increased a full tenthpercentage point (.10%), beginning April at an average of 3.84%. Mortgage rates are pushed higher by improving growth and especially improving inflation. A still-soft job market and weak housing markets act as a counterbalance to that upward pressure, while the events overseas do add degree of uncertainty to the outlook.

4.0%

5.0%

6.0%

7.0%

8.0%

0 FMAMJ JA SOND0 FMAMJ JA SOND0 FMAMJ JA SOND1 FMAMJ JA SOND1 FM 7 8 9 0 1

Santa Cruz County - March 2011
Single-Family Homes
Citie s County Aptos Capitola Rio del Mar Seacliff San Lorenzo Vly Soquel Scotts Valley Santa Cruz East County West County Watsonv ille $ $ $ $ $ $ $ $ $ $ $ $ Price s M e dian Ave rage Sale s Pe nd Inve n 480,000 $ 534,374 167 311 580 495,000 $ 669,571 7 12 34 548,750 $ 618,567 6 8 20 719,500 $ 672,250 10 20 54 495,000 $ 519,750 4 5 10 270,000 $ 305,652 34 54 81 415,000 $ 466,667 6 13 35 585,000 $ 609,564 14 28 67 555,228 $ 756,326 36 74 132 275,000 $ 355,554 14 34 66 568,500 $ 827,020 5 5 12 228,957 $ 238,154 16 49 28

% Change from Year Before
Pr ice s DOI SP/LP M e d Ave Sale s Pe nd2 Inve n 104 97.8% -9.4% -17.6% 41.5% -4.3% 1.9% 146 100.6% -30.8% 9.8% 75.0% -33.3% -12.8% 100 97.3% -41.3% -51.4% -25.0% 100.0% 11.1% 162 100.3% 24.1% 9.5% 0.0% 11.1% -11.5% 75 95.5% -25.0% -27.5% -20.0% -28.6% -9.1% 71 98.7% -20.4% -6.5% 161.5% 0.0% 1.3% 175 98.0% -27.1% -35.0% -14.3% -23.5% 34.6% 143 96.3% -21.0% -41.8% 133.3% 3.7% 11.7% 110 96.8% -9.6% 5.8% 56.5% 8.8% 16.8% 141 98.9% -8.3% -43.6% -17.6% -19.0% 10.0% 72 92.0% 9.4% 59.2% 150.0% 66.7% -33.3% 52 99.0% -29.8% -28.1% -11.1% -5.8% 100.0%

Susan Strouse, B.S., M.A.
Strouse Realty Group American Dream Realty 5522 Scotts Valley Dr. Scotts Valley, CA 95066 (831) 338-6481 Susan@StrouseRealtyGroup.com http://www.StrouseRealtyGroup.com
DRE #01228878

Page 2

Single-family Hom e Sales

Median & Average Prices

The chart above shows the National monthly average for 30-year fixed rate mortgages as compiled by HSH.com. The average includes mortgages of all sizes, including conforming, "expanded conforming," and jumbo.

Santa Cruz County Homes - Prices & Sales
(3-month moving average—prices in $000's) $1,000 $900 $800 $700 $600 $500 $400 $300 $200 $100 200 180 160 140 120 100 80 60 40 20 0

Santa Cruz County Homes: Year-Over-Year Median Price Change
40.0% 30.0% 20.0% 10.0% 0.0% -10.0% 0 F MA M J J A S O N D 0 F MA M J J A S O N D 0 F MA M J J A S O N D 1 F MA M J J A S O N D 1 F M 8 9 0 1 -20.0% 7 -30.0% -40.0% -50.0%

Susan Strouse, B.S., M.A.
Strouse Realty Group American Dream Realty 5522 Scotts Valley Dr. Scotts Valley, CA 95066 (831) 338-6481 Susan@StrouseRealtyGroup.com http://www.StrouseRealtyGroup.com
DRE #01228878

FORECLOSURE STATISTICS
Notices of default, the first step in the foreclosure process, in Santa Cruz County decreased 41.3% in February from the year before. Notices were down 14.3% from January. Notices of sale, which set the date and time of an auction, and serve as the homeowner's final notice before sale, were up 13% year-over-year, and up 2.4% from January. After the filing of a Notice of Trustee Sale, there are only three possible outcomes. First, the sale can be cancelled for reasons that include a successful loan modification or short sale, a filing error, or a legal requirement to re-file the notice after extended postponements. Alternatively, if the property is taken to sale, the bank will place the opening bid. If a third party, typically an investor, bids more than the bank's opening bid, the property will be sold to the third party; if not, it will go back to the bank and become part of that bank's REO inventory. In January, cancellations were up 17.7% year-overyear, and up 11.1% from January. Properties going back to the bank dropped in February from January by 7%. Year-over-year, properties going back to the back declined 11.7%. This is good news. But, the total number of homes that have had a notice of default filed increased by 11.6% in February compared to February 2010. Although, they were down 9.4% from January. The total number of homes scheduled for sale increased by 1.8% from January, and, were up 5.5% year-over-year. Unfortunately, the total number of homes owned by the banks was up 24.97% year-over-year. Ouch!

Santa Cruz County Condos- Prices & Sales
(3-month moving average—prices in $000's) $700 s e c$600 i r P e$500 g a r e$400 v A &$300 n a i d$200 e M $100 0 FMAMJ J ASOND 0 FMAMJ J ASOND 0 FMAMJ J ASOND 1 FMAMJ J ASOND 1 F 7 8 9 0 1 45 40 35 30 25 20 15 10 5 0

Table Definitions _______________ Median Price
s e l a S o d n o C The price at which 50% of prices were higher and 50%were lower.

Average Price
Add all prices and divide by the number of sales.

SP/LP
Sales price to list price ratio or the price paid for the property divided by the asking price.

Santa Cruz County - March 2011
Condos/Townhomes
Citie s County Aptos Capitola Rio del Mar Scotts Valley Santa Cruz Watsonv ille $ $ $ $ $ $ $

DOI
% Change from Year Before
Pe nd2 Inve n -20.0% 29.5% -57.1% 33.3% 50.0% -50.0% -40.0% 24.0% 33.3% 60.0% -9.1% 1.9% -9.1% 88.9%
Days of Inventory, or how many days it would take to sell all the property for sale at the current rate of sales.

Price s Price s M e dian Ave rage Sale s Pe nd Inve n DOI SP/LP M e d Ave Sale s 250,000 $ 309,504 29 72 193 199 95.8% -31.1% -15.9% 3.6% 212,500 $ 212,500 1 3 4 120 96.6% -54.0% -54.0% -50.0% 311,500 $ 360,500 4 12 6 45 96.8% 9.3% 14.4% 33.3% 438,000 $ 438,000 2 3 31 464 91.6% -18.9% -18.9% 100.0% 254,900 $ 272,467 3 8 8 80 98.6% -39.3% -33.4% 0.0% 270,950 $ 316,150 6 20 55 275 94.6% -24.6% -14.0% -14.3% 170,000 $ 179,914 7 20 17 73 97.9% -0.6% 1.3% 40.0%

Pend
Property under contract to sell that hasn’t closed escrow.

Inven
Number of properties actively for sale as of the last day of the month.

Page 3

THE REAL ESTATE REPORT
Santa Cruz County

Susan Strouse, B.S., M.A.
American Dream Realty
5522 Scotts Valley Dr. Scotts Valley, CA 95066

(831) 338-6481 Susan@StrouseRealtyGroup.com http://www.StrouseRealtyGroup.com

Go online to see the full report with the city by city breakdown:

http://www.StrouseRealtyGroup.com

Santa Cruz County Foreclosures
Total Inventories
1,000 900 800 700 600 500 400 300 200 100 10 F M Preforeclosure A M J J 10 Scheduled for Sale S O N D 11 Bank Owned

This Real Estate Report is published and copyrighted by http://rereport.com. Information contained herein is deemed accurate and correct, but no warranty is implied or given.

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