Santa Cruz Real Estate: Will House Prices Go Down in Santa Cruz?

Santa Cruz is a unique coastal city in California, but some question if it has any ties to Silicon Valley, the world-famous technology center. The local property market is a prime example of how this lack of clarity has contributed to the current market dynamics in Santa Cruz real estate.

The gravitational pull of Silicon Valley is progressively altering market dynamics for Santa Cruz properties, obscuring the county's traditional Central Coast identity. Thus, the area is now entangled with the volatile economic dynamics of a leading global technology center.

Because of the exorbitant cost of houses for sale in Silicon Valley, many people are now more than ever interested in relatively cheap houses for sale on listing platforms. Living in Santa Cruz and commuting to Silicon Valley for work is cheaper. Whether this trend benefits or undermines Santa Cruz real estate hinges on individual perspectives—whether one is buying or selling property.

So, the hard questions investors continue to ask include: is it smart to buy a house now? When will home prices go down? When will the house market crash again in Surf City? If we want to know more about what the Santa Cruz home market will probably do, we must look at the big picture.

Insights into Santa Cruz Real Estate: First Quarter 2024 Market Trends

According to data from Realtor.com, the median listing price for houses for sale in Santa Cruz County was $1.6 million in April 2024. This figure represents a drop of 5.9% compared to the previous year's listing price.

Listed Santa Cruz houses for sale had a median price per square foot of $996, while the ones that were actually sold had a median price of $1.5 million. With an average sale-to-list price ratio of 100% in April 2024, Santa Cruz homessold for close to the asking price. There was a slight decrease in the median days on the market compared to March and the preceding year. In May 2024, homes, on average, sold after 24 days.

Will House Prices Drop Soon In Santa Cruz?

The market for houses for sale in Santa Cruz County has shown consistent stability, with no significant declines seen in recent months despite the expected short-term fluctuations. Housing prices have generally remained relatively high. There might be some minor fluctuations because of market dynamics and seasonal factors, but that's all. Santa Cruz's townhome and condo median sales price has lately surpassed the national average. Even though the median prices are ridiculously high, the stunning landscape, limited supply of houses, and high demand all contribute to the premium prices for the Santa Cruz real estate market.

The trends observed in Santa Cruz mirror those unfolding in the broader U.S. economy. Predictions and trends about the possibility of a decline in US house prices this year are varied based on the currently available data. In 2024, US house prices are expected to grow 2.5%, according to economists at Wells Fargo. However, a more moderate increase of 2.33 percent is what HousingWire has in store for 2024. Conversely, Freddie Mac has changed its tune from a pessimistic to a more optimistic projection; it had initially projected a 2.5% increase this year and a 2.1% increase in 2025. Right now, the mortgage behemoth says that prices would only go up 0.5% in 2024 and 2025.

According to the National Association of Realtor statistics, the median price for houses for sale in the country was $384,500 in February 2024, a 5.7% rise from the prior year. Also, when compared to the previous year, property values throughout the country, including distressed sales, rose 5.5% in December 2023. All signs point to housing values continuing their recent rising trajectory.

Depending on the direction interest rates go, there may be signs of possible house price stability or small declines.

When Will House Prices Go Down?

The proper answer to the question, ‘When will home prices go down in Santa Cruz?’ will depend on several variables.

The number of houses for sale on the market has to increase substantially. With more supply on the market, home prices would be less likely to rise, bringing them down to a more reasonable level or possibly even helping them to somewhat recede from their recent highs.

Mortgage rates also need to fall, which would likely trigger refinancing. Refinancing an existing mortgage at a lower interest rate could cut monthly payments for homeowners. Homeowners who refinance may decide to sell their existing properties, which might lead to an increase in inventory in the market and, ultimately, lower prices. However, with a recent rise of over 7%, this will take longer than anticipated. The 30-year fixed-rate mortgage interest rate was 7.52% at the beginning of the third week that ended on the 9th of May 2024. At the exact same time in April, the rate was 7.42%.

Don't expect them to chill down too soon, even if mortgage rates eventually decline. This is a double-edged sword. Quick rate drops might lead to a demand spike that erases any increases in inventory, still driving up housing prices after a while.

The housing market can only eventually recover to levels seen in 2014–2019 if mortgage rates return to the usual upper 4% to lower 5% range. However, it will probably take quite some time before we return to those prices.

Frequently Asked Questions

Will the Real Estate Market Crash?

There may be high mortgage rates, but it hasn't stopped the general shortage of homes for sale in Santa Cruz from pushing up home values and prices. Experts believe it will be less severe than the Great Recession despite the possibility of a correction. Two forces are acting on the Santa Cruz real estate market at once: on the one hand, mortgage interest rates are dragging prices down, while on the other hand, overwhelming demand and scarce supply are pushing prices up. So, if you're wondering, "Is real estate market going to crash?" here's the answer. A crash in the Santa Cruz real estate is quite improbable, given all of this, even if affordability is an issue.

What lies ahead for houses for sale in the Watsonville, CA housing market in 2025?

As we look into the recent past to examine the landscape in which homes for sale in Watsonville, CA, have been operating, we do not predict a significant decrease in home prices next year. However, in contrast to the dramatic increase seen from 2021 to 2023, we anticipate a more moderate increase in housing prices from 2025 to 2028. Everyone agrees that the current momentum in the Santa Cruz properties market will mean there won't be any high-quality cheap houses for sale at a prime location like Watsonville, even if no one has said with certainty by what exact percentage.

Locating mobile homes for sale under $500 in this area is challenging. By the end of the second week of May 2024, the average value of homes for sale in Watsonville, CA, stood at $847,548, reflecting a 4.2% increase compared to the previous year. These homes typically entered a pending status after around 18 days.

Where do I Find Cheap Land for Sale

Land prices in rural and outskirt parts of Santa Cruz are often lower than in urban or coastal locations. Please remember this if you're a buyer searching for the cheapest land for sale in the county. Try avoiding Santa Cruz properties in the city center and the coastal regions. Places like Felton and Scotts Valley are among those to consider. And it is not just land. Scotts Valley homes for sale are also less expensive than those in other places like Westlake.

How do I find Mobile Homes for Sale Under $5000 in Santa Cruz?

The Santa Cruz real estate market is often characterized by high property values and high demand. Finding good mobile homes for sale under $500K in the area can be difficult. However, try to implement any of these ideas.

• Internet-Based Ads: Craigslist, Facebook Marketplace, and local classified advertising are good places to start when looking for cheap mobile homes for sale. You can be lucky to come across some nice but inexpensive houses for sale that sell at discounted prices occasionally by sellers looking to move quickly.
• Parks for Mobile Homes: Contact Santa Cruz's local mobile home parks or communities to find out if any properties are within your budget.
• Real Estate Auctions: You may come across affordable Santa Cruz homes for sale, especially during foreclosure auctions. Conduct thorough research, and consider exploring even abandoned homes for sale cheap. You might be surprised to encounter listings for “mobile houses for sale under 500K," "houses for sale under 800K," "houses for sale under 700K," "homes for sale under 600K," and even "houses for sale under 500K." However, carefully read the auction description and terms before placing any bids.
• Local Dealers: Contact mobile home dealerships, real estate agents, realtors, or retailers in your desired location to learn about any clearance sales, promotions, or cost-effective choices that may be available. Sometimes, local dealers may know some cheap old houses for sale that you might want to look at.
• Building a network: Establish ties to real estate agents, property managers, and mobile home investors in the Santa Cruz area; they may know of locations where you can find a mobile home for sale.

Why Is it Smart to Buy a Home Now in Los Gatos?

Many individuals browsing through the "MLS listing Santa Cruz" to explore viable homes for sale in Santa Cruz often turn their attention to Los Gatos homes for sale. Notable features of this area include its thriving downtown, first-rate public schools, and active community members. Nestled in the picturesque Santa Cruz Mountain foothills, the region is home to welcoming, hardworking locals. You will unwind in the heart of San Jose's southwest district, providing you with convenient access to a bustling urban center.

Paul Burrowes, CRS, CCEC, SFR, NHCP, LHC, REALTOR® Licensed REALTOR® with over 15 years of experience and expertise. Commits to being on time and transparent. Acts as your consultant to ensure you make the best decisions to fit your transaction at every step in the process. Negotiates towards a low stress, win-win outcome. Handles all the details for you, ensuring the hundreds of steps in your real estate transaction go smoothly. Proudly serving Silicon Valley, Santa Cruz, Monterey, and Santa Clara Counties! | DRE# 01955563 | (831) 295-5130 | [email protected] |