Santa Cruz Housing Market – Surfing the Waves of Opportunity


|10 min read

Click here to browse our Real Estate Agent Directory and contact top-rated agents in your area!

Are you ready to embrace the Santa Cruz lifestyle? What does it take to surf the Santa Cruz housing market? Hop on this wave, and we will explore the trends and predictions for the 2024 housing market in this coastal paradise. Now, no one has a crystal ball, but what we do know is that the trends tell us a compelling story – let’s dive in! 

How is the real estate market in Santa Cruz County?

The Santa Cruz Housing Market is Making Waves

Prepare to be flexible; the Santa Cruz County housing market is riding high on a wave of excitement and opportunity.

For those in the market for single family homes, they face a price point of $1.3M. Looking at homes on the coastal side of Santa Cruz County, expect numbers to swell between $2M and $3M.

If you’re in the market for a condo or townhome, properties are going for a median price of $770,000 and an average price of $913,000. According to MLS listing data in September 2023, mobile homes were selling for an average price of $300,000.

Data: Catching the Market Wave

Is there a housing shortage?

Santa Cruz County is indeed feeling the squeeze of high demand and limited supply, making it a seller’s paradise. The number of homes for sale is often fewer than the Nation as a whole, adding a touch of exclusivity to this coastal gem. 

Not only is there a limited supply of homes in Santa Cruz, but there’s also an affordability issue.

Santa Cruz County’s 2023 Housing Element discussed the community’s goals and looked for ways to maintain, improve, and develop housing.  As a stakeholder at the conference, we discussed the lack of affordable housing and set goals for new developments. According to UC Santa Cruz, “60% of Santa Cruz residents are renters, with the median rent pushing past $3,000 per month.” With the high cost of living and lack of affordable housing, some in Santa Cruz are facing a crisis.

What is the median list price in Santa Cruz? How does this compare to the Nation?

A median price is a way to measure the prices of homes in the area while ditching the outliers, like the multi-million dollar homes of Santa Cruz or the homes that are slated for the Affordable Housing Program. Therefore, the median sale price can give us a truer sense of what housing values actually are.  

In August 2023, the median sale price of a single-family home was $1.2M. Many choose to rent because the price of a home is more than double the National median of $420K.  Townhouses and condos in Santa Cruz saw a median sale price of $797K, also above the national median. 

While these median prices are astronomical, the limited supply of homes, coupled with the stunning landscape and high demand for houses in Santa Cruz, are what drive up the price of homes.  In addition, most homes receive multiple offers, further elevating prices.

The Santa Cruz real estate market experienced a 4% increase in median sale price year over year, at a time when most areas in the United States experienced stagnant or declining prices.

The median list price in Santa Cruz County may give you a little sticker shock, but it’s worth every penny for a slice of paradise. Home values are higher than the national average and the California state average of $741,789 reflecting the premium placed on California coastal living.

How have home prices changed?

Unlike the rolling waves of the Pacific, housing prices in Santa Cruz County have been buttery and calmly climbing over time, making homeowners rejoice and buyers strategize.

Last year, the average sales price for a single-family home in Santa Cruz County was $1,312,915, and the median was $1,150,000.

So far, in 2023, we are at an average sales price for a single-family home of $1,301,294, and the median is $1,175,000.

Compared to previous years, home prices are steadily swelling. The median home price in 2020 was $972,500, and in 2021, it was $1,061,000.

Santa Cruz surged with the rest of the country as people moved to remote work. As individuals were able to increase their ability to work from home, many of them chose pretty places to live.

From 2020-2021 the peak increase was about 16% in average home prices (9% Median).

While prices have declined slightly compared to the peak, the median sales price is still up 35% compared to September 2020.

Those feeling as though a “crash” is upon us aren’t looking at the numbers. Individuals who own a home are maintaining and growing their equity in Santa Cruz County. It is still in a highly desirable area with low inventory and very few homes on the market.

How are interest rates affecting affordability?

With interest rates going up, we see less Silicon Valley investors looking to enter the housing market.

We are now seeing more primary residence homebuyers. Additionally, with the rise in interest rates, some homebuyers are finding that they need to modify their budget. Properties they could afford last year are now out of reach with the higher mortgage rates.

Some homebuyers have had to leave the market entirely while they save up or hope for interest rates to go down. Other buyers are seizing the opportunity to get a home while there’s a less competitive market.

Sellers often include people who need to move because of life changes, moving closer to family, or retiring in different places in California or out of state with lower taxes than Santa Cruz County. With the consistent appreciation of homes in the Santa Cruz housing market, most sellers are walking away with a profit.

While the number of home sales in Santa Cruz declined over the past year, this is in keeping with the macro housing trends. Those who locked in low-interest rates over the past several years are not enticed to leave their current home; therefore, home sales across the nation have slowed.

How long are homes staying on the market?

Homes in Santa Cruz County are like hotcakes at a brunch spot – they don’t stay on the market for long! (Please visit the local Harbor Cafe for arguably the best brunch in the county!)

Quick sales are the norm in Santa Cruz, showcasing the desirability of the area. Homes sell on average in 21 days. While the days on market have increased over the past year, the velocity of homes in Santa Cruz is still much quicker than average days for the nation.

The typical time to close escrow in most contracts is 30 days. However, this CA housing market is hot, and properties sell quickly.

>>Got Questions? Ask a Licensed Real Estate Agent for Advice

2024 promises a continuation of the seller’s market, with a growing emphasis on eco-friendly and sustainable properties.

We, as a county, have been affected by floods, storms, landslides, and tsunamis. We take nature seriously and have an ethos of giving back to her.

Santa Cruz County is also seeing an influx of remote workers seeking a perfect blend of work and play. Anywhere in the county, you are less than 15 minutes to either the beach or the redwoods. We are sprinkled with State Parks and State Beaches, as well as local parks, trails, and hidden beaches.

Timing the Housing Market: Riding the Perfect Wave

Is it a good time to sell a home in Santa Cruz?

Absolutely! The current seller’s market in Santa Cruz County means you can ride the wave of high demand and secure an excellent return on your investment.

Let it be said that there is never going to be a good time to buy and sell at the same time. This is because if it’s a “seller’s market” then buying is tough and vice versa.

To mitigate this, I highly recommend looking into companies that offer a buy BEFORE you sell option. This allows you to take advantage of the equity in your home and make an offer on your replacement property “like cash,” with few contingencies. Ultimately, this makes your offer stronger than one with a typical loan.

Is it a good time to buy a home in Santa Cruz?

For those willing to paddle out, 2023 offers opportunities to snag a piece of this coastal paradise.

With mortgage rates rising, now may be your time to catch the wave. You may not have heard the phrase “date the rate, marry the house,” but in terms of home buying, that may be how you need to re-frame things.

As rates rise, buyers fall off the homebuying wave. You will have less competition and are more likely to submit a winning offer. That being said, if rates come down, then you can refinance and reduce your monthly payment.

Interest rates may never come down to 2% again, but even a small rate decrease will save you money. Remember, you have to wait one year to refinance, so make sure you can afford your mortgage payment and don’t rely on them coming down. 

Who is Riding the Wave?

Are Baby Boomers dominating the housing market?

While Baby Boomers are certainly active in the market, Santa Cruz County attracts a diverse range of buyers, from young families to retirees looking for a slice of coastal paradise. However, there are fewer millennial home buyers than in the last few years due to Silicon Valley lay-offs and rising interest rates. 

Who is the typical home buyer?

The typical Santa Cruz County home buyer is a cash buyer, people downsizing, and remote workers looking for an active outdoor lifestyle. While competition is fierce, opportunity awaits those who are determined.

Where there is a will, there’s a way! Connecting with a pro real estate agent sooner will help you get a solid plan. 

Who is the typical home seller?

Sellers come from all walks of life in Santa Cruz County. From those looking to downsize to those cashing in on their smart investments. Also, home sellers include life changes such as babies, marriage, and divorce. All can mean needing to make a change and sell.

Moving to Santa Cruz County: The Lure of the Coast

Why are people moving to Santa Cruz County?

People are flocking to Santa Cruz County for its stunning natural beauty, vibrant communities, and excellent quality of life. Some are leaving to explore new horizons, but many are drawn back to the waves.

What qualities are people looking for when moving to Santa Cruz?

Prospective residents seek a harmonious blend of coastal living, outdoor adventure, and a strong sense of community in Santa Cruz County.

Are people prioritizing mental health when moving?

With the healing powers of the ocean and the tranquil coastal lifestyle, mental health and well-being are paramount considerations for those making the move to Santa Cruz County.

Housing Market Predictions for Santa Cruz County

In Santa Cruz County, we anticipate the wave of opportunity to continue. With sustainable living and tech-friendly amenities becoming more prevalent, eco-friendly buyers are drawn to Santa Cruz.

With its proximity to San Francisco, Santa Cruz allows for a dreamy outdoor lifestyle, while also being able to access the excitement of the city. In addition, the increase in remote and hybrid work has allowed people to move farther away from the city center, making Santa Cruz an attractive option.

Demand for homes in Santa Cruz will remain strong. Coupled with the low inventory available, prices are anticipated to increase throughout 2024.

While Santa Cruz has plans for building up with more rentals, homes will continue to be scarce.

Conclusion: Dive into Santa Cruz County Real Estate

Santa Cruz County’s housing market is a thrilling ride for both buyers and sellers, offering unique opportunities and lifestyle benefits.

Navigating the Santa Cruz County market can be like riding the surf, so it’s crucial to have an experienced real estate agent by your side to help you catch the perfect wave to your dream home or investment property. So, grab your board and ride the Santa Cruz County real estate market wave to success!

Megan Kilmer Revest Homes, Inc.

Megan Kilmer is a Santa Cruz County local with a passion for housing. Megan has a background in Social Services and is an expert on goal setting and motivation. With a wide network of trusted local resources, she is a problem solver! Need to buy, sell, lease, manage, or finance a real estate project? She's got you!

You may also be interested in...

Unlocking the Seattle Dream: A Guide to Finding Your Perfect  Home in Seattle 

Seattle, Washington: a city of lush greenery, vibrant neighborhoods, and a booming tech industry. With low i… read more

How to Write a Winning Real Estate Offer in Massachusetts

Click here to browse our Real Estate Agent Directory and contact top-rated agents in your area! The Massac… read more

NAR Settlement: What it Means for Home Buyers and Sellers

With decades of real estate experience, Chris Spina shares his invaluable professional perspective on the NAR… read more

Expert Answers: 5 Common Mistakes Home Sellers Make

Click here to browse our Real Estate Agent Directory and contact top-rated agents in your area! Mike Jepps… read more