Santa Cruz County housing market heating up as spring and summer near
The spring and summer housing market is beginning to manifest in Santa Cruz, with the county seeing more than 20 more home sales in March than it did in February. It’s still a seller’s market, though, and buyers are working creatively with lendersand real estate agents to navigate the crowded and competitive market.
Santa Cruz County’s housing market is heating up with the warmer weather. Sales and prices rose in March compared to February, while homes are sitting on the market for less time than they were a year ago. Cash buyers remain active in the market, real estate agents and mortgage advisors say, with 30% to 40% of home sales being entirely cash.
Countywide, there were 33% more home sales in March than in February — 89 versus 67, according to data from the Santa Cruz County Association of Realtors. That was still below the market activity from March 2023, when the county saw 96 sales. That comes out to about a 7% decrease. As usual, Aptos, Santa Cruz and Watsonville saw the most activity last month.
The countywide median sale price rose 4.7% in March from a year earlier, reaching $1.315 million compared to $1.255 million in March 2023. Properties spent less time on the market on average in March than February, dropping from 51 days to 35 days. That’s noticeably lower than in March 2023, when homes stayed on the market for an average of 53 days.
March is typically the time of year when home sales pick up as the market wakes up from its winter hibernation and moves toward the often busy summer period. Santa Cruz County Association of Realtors agent Jennifer Watson said just the past few weeks have shown a marked uptick in activity.
“We notice even just going to open houses isn’t as common when it’s raining, but the weather really impacted people recently,” she said. “As soon as the sun comes out, people start getting out and showing up.”
Watson spoke to the high proportion of cash buyers in the local market — a record two out of five homes sold for cash in Santa Cruz County last year — and said that there are levels of nuance to that trend.
Some of those buying homes with cash have pulled out equity from homes purchased during the frenzied pandemic market. If a buyer has enough equity in their home, some loans will allow them to “float” the purchase of a new home until they can sell their previous home. Others have sold their homes already, and choose to live in short-term rentals until they find something they want to purchase.
Watson recalls a client who bought a Watsonville home recently after selling his Oregon home and moving to Sunnyvale for work. He had lived in rentals and hotels until finding the Watsonville property.
“They appear that they just have pocket money to burn, but truly, they’ve either sold something or are using equity,” she said.
Watson added that buyers exploring these kinds of options shows that people are learning how to navigate after a pandemic stretch when 3% interest rates were common, and to afford homes even as mortgage rates have more than doubled those of just a few years ago.
However, she said, she has noticed some buyers shooting for smaller properties in exchange for better prices. Seniors and first-time buyers, most noticeably, are opting for slightly smaller homes like cottages, townhouses and condos: “I suspect we’ll see a little blip with purchases in that realm.”
Watson and Monterey Bay Mortgage advisor Scott Goodrich said the market still favors sellers, as there are still many more buyers than sellers. Goodrich said he has a client looking at a townhouse in Aptos, and he’s interested in seeing how many offers are presented, and how pricey they are.
“That [seller’s market] is still driving these prices higher, and the effective [mortgage] rates in the 7% range are still not pulling a lot of people out of the marketplace,” he said.
Source: LookOut Santa Cruz
