The real estate market in Santa Cruz is subject to the same market pressures that affect other areas, with some exceptions. First, Santa Cruz and the environs is a great place to live. That's why so many people drive over the hill to Silicon Valley every day to work there while they live here, and why people from the San Francisco Bay Area drive to the coast to enjoy the beaches, the boardwalk, the wharf, the restaurants, and the general ambience of central coast living.
As a result, home values in the Santa Cruz area have held fairly well. Many area of the US have lost 50% or more of their value, but our values have declined much less. Very expensive properties seem to have lost the most, but in the greater scheme of things, they are holding their own. Their price drops seem greater than other properties, but the reduction is about the same as homes in the $700,000 range. If you have a home on West Cliff Drive that was valued at $3,000,000 before the housing bubble hit, it's probably dropped to the low 2's, about 21-26%. The same is true for most of the housing in the area. A drop in value of 30% or less seems to be the general rule.
However, in the last few months, recovery is on the way. Proximity to Silicon Valley is a great influence on Santa Cruz property values. Because the county has had such a slow-growth/no-growth policy for so long, the supply of homes has tended to remained behind the demand. Certain areas are also built out, like any of the areas that have great views of the coastline, so the supply is naturally limited. Having such a venture capital engine as the Silicon Valley in close proximity has also affected prices positively. A lot of Apple, Facebook, Google and other high tech employees have found that living in Santa Cruz area or having a second home on the coast is very desirable. A lot of money travels over the hill. As Santa Clara Valley becomes more congested, it's a nice respite to live in a less frantic environment, at least for the weekend if you're a commuter.
Recent improvements to Highway 17 have also helped make the commute less of a trial. I commuted for 28 years from Soquel to Cupertino, and the highway is in better, safer condition now than it's ever been.
Lately, the market has seen some real heat from both individual buyers and investment buyers and groups. One home in an area of the county that lost a lot of value when the bubble burst had 21 offers last week! Another home in the same area had seven offers. A lot of these are coming from individual investors or investment groups who are looking at garnering properties that are good rentals. These homes originally sold in the low 3's and 4's, ran up to the mid 8's, then dropped back to the 3's. The larger ones are hovering around $500,000 this spring.
In short, it's a good time to be a seller in this market if you aren't looking at putting an unreasonable price on your property. It's a good time to be a buyer if you have an agent with strong negotiating skills to lead you through the maze of multiple offers.
Contact me or my partner, Lynne Bucher. Together we have 40 years of real estate experience to share.
Tom Clarke Lynne Bucher
DRE# 01868478 DRE# 00615504
831.234.1339 831.234.2282
TDCrestorations@gmail.com lynne@lynnebucher.com
Lynne Bucher DRE# 00615504 831.234.2282
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