Five Key Santa Cruz CA Housing Market Trends For 2024
- Sky Gomez
- Sep 26, 2024
- 4 min read
Updated: Oct 13, 2024
Santa Cruz is a fantastic place to call home! Few areas can match the diversity here, with stunning oceans, serene forests, and a vibrant community culture. However, the conversation around home prices in Santa Cruz can be a bit more sobering. The cost of living—particularly when it comes to buying or renting a home—remains high. For instance, while a 3-bedroom, 2-bathroom home on the Westside of Santa Cruz might sell for around $1.6 million, a similar home in Lovelock, Nevada, could be snagged for just $240,000. That’s roughly a 566% price difference!
Disclaimer: This article is intended for entertainment purposes only. Always consult a financial advisor or other relevant professional before making significant financial decisions, such as purchasing a home. Historical trends or data cannot guarantee future outcomes.
Data provided by MLS Listings Inc. and submitted by the Santa Cruz County Association of Realtors.
To navigate this dynamic real estate market, it’s essential to understand the key trends influencing the Santa Cruz housing landscape in 2024. Various factors—such as supply, demand, population growth, seasonality, and political climate—are constantly shaping the market. A deep understanding of these elements can help you make informed decisions—whether you’re looking to buy or sell in this beautiful area.
1. Supply
So, just how many homes are available in the Santa Cruz area? The graph below, showing the number of residential properties sold from 2019 to today, provides a useful glimpse into home supply trends.
Data provided by MLS Listings Inc. and submitted by the Santa Cruz County Association of Realtors.
As the data above indicates, the current number of homes sold mirrors similar levels seen back in 2019. West Santa Cruz saw a bump in homes sold during the uncertainty of the 2020+ pandemic, but these numbers have fallen in recent years. Overall, this data suggests a five-year history of unfluctuating supply. If this trend persists, it signals the potential for even higher home prices in the future. If this trend is interrupted by an increase in supply—whether from more home sellers or newly constructed living space—it could slow the pace of rising prices. We will be keeping an eye on new county initiatives for more housing.
Past: Unfluctuating Supply 📈 Present: Unfluctuating Supply 📈 Future: Potential Increase in Supply 📉
2. Demand
Homes in Santa Cruz sell fast. According to Redfin, Santa Cruz is a very competitive market with average homes selling for about 1% above list price and going pending (sales offer accepted by the seller) in around 31 days. Highly desirable homes can sell for about 4% above list price and go pending in around 17 days. Nearby areas such as Scotts Valley and Felton are also considered competitive.
With Santa Cruz being a picturesque coastal city just a short, windy drive along Highway 17 from major tech hubs like San Jose and Sunnyvale, demand for housing is unlikely to drop anytime soon. Its proximity to Silicon Valley, combined with its natural beauty, continues to make it an attractive option for both professionals seeking a balance between work and lifestyle, as well as retirees or remote workers drawn to its charm, and investors looking to benefit from this high-demand resource.
Past: High Demand 📈
Present: High Demand 📈
Future: Likely High Demand 📈
3. Population Growth
Santa Cruz County, with a population of approximately 267,792, has experienced a -2.64% decline since 2017. Similarly, California has experienced its first historical negative growth rate starting in 2021 of -1.36%. Data source: U.S. Census Bureau.
This population decline can be attributed to several factors, including Santa Cruz’s significant elderly population, the high cost of rent and homeownership, and inflation, which has prompted many residents to relocate to more affordable states. A declining population can put future downward pressure on home prices.
Past: Slight Decline in Population 📉
Present: Slight Decline in Population 📉
Future: Possible Declining Population📉
4. Seasonality
The best time to buy a house depends on your circumstances, but in general, the best deals are found in fall and winter, while the worst time to buy is spring:
Fall and Winter: Home prices are typically lower and there's less competition from other buyers.
Spring: Typically, there's more inventory to choose from during the Spring, but that also makes it the most expensive season. May is often the worst month for finding a deal.
Late Summer and Early Fall: Typically, there's a good selection with less competition and slightly lower prices.
Spring: Very Expensive 📈
Summer: Expensive 📈
Fall: Expensive 📈
Winter: Cheaper 📉
5. Political Climate
The political climate in Santa Cruz significantly influences homebuying trends amid the ongoing housing crisis. Local leaders are responding to state mandates for affordable housing by advocating for higher-density developments, particularly in downtown areas. This shift aims to address the region’s housing shortage and stabilize skyrocketing home prices. However, the push for increased construction has sparked debates among residents and activists, with some advocating for more community input on development projects. As these discussions unfold, potential homebuyers should stay informed about local policies and market conditions, as they will play a critical role in shaping Santa Cruz's housing landscape.
Additionally, the upcoming presidential election will also play a role in home prices. From October to November, there's typically a slight slowdown in home sales (3-5%). In fact, data from the Department of Housing and Urban Development (HUD) and the National Association of Realtors (NAR) found that after 9 of the last 11 presidential elections, home sales increased in the year following the election.
Conclusion
Navigating the Santa Cruz housing market in 2024 can feel like trying to catch the perfect wave—thrilling, yet unpredictable. With a mix of supply constraints, persistent demand, shifting political landscapes, and seasonal trends, understanding these key factors will help you ride the currents of this dynamic market. Whether you're looking to buy a cozy cottage by the beach or a trendy downtown condo, staying informed and adaptable will be your best bet for securing your dream home in this beautiful coastal paradise. So, grab your surfboard (or your real estate agent), and let’s ride this wave together!
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