All You Need To Know About the Santa Cruz Real Estate Market

Fancy living in Santa Cruz? Is it the idea of living in an ultra-mellow beach town or the picture-perfect lifestyle you’re envisioning while looking up all the adventures to embark on with your family? Either way, we totally get it—the Golden State’s surf haven is the place to rest easy. The only prerequisite you need is knowing the ins and outs of Santa Cruz’s real estate market, and we’re here to help.

Santa Cruz House Prices 

When the first quarter of 2021 came to a close, the median housing price in Santa Cruz County had eclipsed the million-dollar mark. Furthermore, reports have come to show that the median price was up almost 21 percent compared to the first quarter of 2020, reflecting that half the homes sold during the three-month period were above that price.

According to real estate agents, all of this is taking place because of the phenomenon of “overbidding.” When a would-be buyer bids over the listing price, they’re trying to one-up all the other offers (a few even already submitted) and trying to show the sellers that they’re house-owner material. And as Santa Cruz stats showed in 2020, a lot of people are following this course of logic—more than half the homes that closed in March sold for more than the listing price.

As for the current day, the typical home value for the county is looming around $1,269,500, according to Zillow.

The Santa Cruz Real Estate Trends To Keep Up With

Increasing house rates aren’t a reason to give up—the real estate market is and will always be a double-edged sword. And while 2021 might have felt like months upon months of price growth, the tide has shown signs of slowing down, even if for just a tiny bit.

Recently, Santa Cruz’s housing market has begun to slow down, and fewer buyers are applying for mortgages to purchase—a few cracks are beginning to show in the otherwise upwards-growing trajectory. While the competition for sale is still daunting, it no longer feels quite as intense; this can give buyers much-needed relief.

Less Bidding Wars

The end of 2020 and the beginning of 2021 made bidding wars the Santa Cruz real estate trend. As mentioned above, people were going above and beyond to secure the house of their dreams, oftentimes setting wildly unrealistic expectations for future buyers-to-be. So for reasons that cannot fully be explained yet, fewer bidding wars started happening, making the whole process much more relaxed and reasonable. The reasonable aspect refers to the asking price, which is great news for people who want to own property without straining their wallets.

A lot of buyers, exhausted from the housing market as a whole, are taking a break from purchasing, slowing down the whole momentum Santa Cruz had going.

Are Prices Going to Drop Dramatically?

We’re afraid this one is a no. Santa Cruz’s house prices are not likely to plummet; the same applies to the surrounding Bay Area for that matter. The reason? The basic principles of supply and demand—no matter how softened conditions are becoming, there are still more people who want to buy homes than there are homes available. Construction plans are unable to keep up the pace, so buyer demand still wins.

But What Exactly are the Reasons for the Softening?

In case you haven’t noticed, more and more people are returning to the office and traveling for businesses as the economy starts to slowly but surely open up. This has its effects on the real estate market; the time you actually spend at home becomes directly tied to your willingness to move, buy, rent, or sell. Let us explain. 

Families may be less willing or able to move farther away from their workplace with restrictions opening up. Whether it’s due to convenience or disdain of the commute, location comes into play much more notably this time around. Additionally, families might not need as much space now that home offices are growing less in demand, kids are going back to schools, and gyms have reopened.

As the economy continues to open up, future buyers are gradually shifting their priorities. Things like family vacations, concerts, sporting events, and retail are indulgences that were taken away from people for a significant amount of time, and now they want to get as much of it done as they possibly can. These are all things that compete against a down payment, as well as monthly mortgage payments. Potential buyers may not want to spend as much of their budgets on a house when there are other things to enjoy in life.

Plus, let’s not forget about buyer burnout. People became tired when Santa Cruz’s housing market showed little to no prospects for them, their income bracket, or location preferences. So, they sort of decided to put the idea of owning a home on the backburner and wait until things became normal again—they essentially chose to sit on the sidelines until the prices cooled and bidding wars let up.

An Overview of the Santa Cruz Rental Market 

While the Santa Cruz housing market has seen dramatic shifts in home prices, the same cannot necessarily be said for all rentals. Rent for single-family property has indeed increased significantly, with buyers and renters competing for the same limited quantity of homes. However, the same thing isn’t happening to apartments. Since there’s less competition, apartments pop up on the market here and there, and plenty of them come with a wallet-friendly price tag.

But of course, everything is zip code-dependent. If you’re looking to rent affordably in Santa Cruz, take a look at a few different zip codes and their rental prices as of the fiscal year 2021.

ZIP code: 95060

One bedroom: $2,560
Two-bedroom: $3,380
Three-bedroom:$4,420
Four-bedroom: $4,940

Zip Code : 95061

One-bedroom: $2,290
Two-bedroom: $3,020
Three-bedroom: $3,950
Four-bedroom: $4,420

ZIP code: 95062

One-bedroom: $2,320
Two-bedroom: $3,060
Three-bedroom: $4,000
Four-bedroom: $4,480

ZIP code: 95063

One-bedroom: $2,290
Two-bedroom: $3,020
Three-bedroom: $3,950
Four-bedroom: $4,420

ZIP code: 95064

One-bedroom: $2,470
Two-bedroom: $3,250
Three-bedroom: $4,250
Four-bedroom: $4130

ZIP code: 95065

One-bedroom: $2,910
Two-bedroom: $3,840
Three-bedroom: $5,020
Four-bedroom: $5,620