Keeping you up to date with Santa Cruz Real Estate

Weekly Market Update

• The hottest zip code in the county in terms of the Market Action Index (ratio of inventory/homes selling) remains the Eastside (95062) with an index of 51 and a median list price of $2,249,000.
• 23 properties sold in the county this week with an average sale price of $1,522,756.
• There are 493 active for sale properties on the market here in Santa Cruz County. (it was 461 last week).
• Market action across all areas in the county have dropped despite falling rates, this is normal for this time in the season. That being said, well priced, larger and turn-key homes are still seeing multiple offers.
• The average interest rate for a standard 30-year fixed mortgage is 6.32% today, a decrease of -0.06% from seven days ago. The average rate for a 15-year fixed mortgage is 5.57%, which is a decrease of -0.11% compared to a week ago. 

Santa Cruz News

6-Story Apartment Proposal in Midtown Santa Cruz Prompts Sept. 16 Meeting

Eighty apartments are proposed at a vacant lot at Soquel Avenue and Cayuga Street in Santa Cruz.

Santa Cruz-based developer Workbench submitted plans for the vacant lot at Cayuga Street and Soquel Avenue in May. 

• The pre-application describes a six-story building with, 33 studios, 33 one-bedroom apartments, 10 two-bedroom apartments, and a future conversion of some areas into four one-bedroom homes. 
• Ground-floor shops are proposed.
• Plans also include 61 parking spaces.

Santa Cruz-based Workbench is the architect and would be responsible for construction, according to plans submitted to the city. The property is owned by the New York City-based developer Union 402 Building, LLC. Santa Cruz County Assessor’s Office records show the developer purchased the 0.27-acre lot last year for $1.6 million.

The proposal takes advantage of state housing laws including SB 330 and the Housing Accountability Act. These laws limit the ability of local governments to alter or deny housing projects that comply with “objective standards.” The project also utilizes a state rule known as a “density bonus” which allows projects to include more units than are allowed by local zoning if the project provides a certain amount of affordable housing. 

The Santa Cruz City Council in 2018 approved a three-story, 12-unit apartment building with ground floor shops on the site. In the end, it “wasn’t penciling out” for the developer, said Mike Ferry, a Santa Cruz senior planner assigned to the project at the time.

Ferry said the 2018 project “falls within our zoning, but now state laws allow you to double.” 

Ferry added, “The state has approved well over 100 housing bills in the last four years, so all projects like that tend to get larger because all these state laws override local ones.”

Market Matters

Mortgage Rates Are Plummeting But Will Sales Grow?

• Monthly mortgage payments for a typical U.S. home have increased from about $1,400 in 2022 to $2,175 due to higher mortgage rates, contributing to historically low home sales.
• Despite rising costs, home prices haven’t declined significantly, except in a few areas that boomed during the pandemic.
• Other real estate costs, such as insurance, have also surged, with insurance premiums increasing by 34% nationally between 2017 and 2023, further worsening affordability.
• Mortgage rates peaked in May 2024 and have since fallen, leading to slightly improved affordability, but homebuyers have been slow to respond, and sales remain low.
• Income growth, stable home prices, and falling interest rates in late 2024 could improve affordability further, but significant homebuyer demand increases may not be seen until next spring.
• States with high insurance costs, like Oklahoma and Texas, face growing affordability challenges, while insurance costs in lower-priced markets like Portland are starting to converge.
• California's chronic housing shortage and inventory constraints keep prices high, and similar inventory crises are emerging in other regions like the Midwest and Northeast, complicating the affordability crisis.

Other Headlines

-Home prices saw unusual stagnation this summer: U.S. home price appreciation continued to slow in July, a trend that is expected to continue through next summer.

-Price reductions in Santa Cruz County are gradually increasing: In August, 30% of 106 listings took a cut, in Aptos 38% of 71 listings took a cut, in Capitola 43% of 23 listings took a cut, and 30% of 54 listings in Watsonville took a cut.

-Santa Cruz City, County prevail in lawsuit against UCSC growth plan: The City and County of Santa Cruz sued the UC Regents in 2022 pertaining to their plan to add 8,000 more new students by 2040. The court ruled in the favor of the city and county and the ruling essentially said the university’s environmental report did not sufficiently address issues related to regional housing, water demand and wildfire evacuation routes. 

Local Market Data

ALTOS Research Market Report

ALTOS RESEARCH MARKET REPORT IS AN INTERACTIVE, REAL-TIME REPORT. IT DISPLAYS THE CURRENT ACTIVITY FOR ANY MARKET YOU WISH.

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US Market Summary

My Listings

Coming Soon: 1485 Dougmar Drive, Santa Cruz- This 2,000 sqft 3 bedroom, 2 bath home was purchased by my client off market and has gone through extensive remodeling and will be on the market shortly. Improvements include: new roof, new flooring, new doors, new windows, new on-demand water heater, new bathrooms, new kitchen, new lighting throughout, landscaping, fresh paint, and much more.

4930 Cliff Drive, Capitola

This luxurious oceanfront property in the heart of Capitola is the most affordable oceanfront single family home in Santa Cruz County! This one-of-a kind home is one of only four single family homes located oceanside above the wharf and at the perfect angle to give you panoramic views of the entire Monterey Bay. On clear days you can even see all the way to the point at Big Sur. Spectacular views and easy access to the best parts of Capitola are just a few features that make this home so amazing. Add to that meticulous maintenance, tasteful renovations, and a layout that really maximizes the view and you have a home that is truly a masterpiece.

3 Bedrooms, 2 Bathrooms, 1,288sqft

Listed at $3,999,000

1460 Lockhart Gulch Rd, Scotts Valley

This 1 bedroom home is 730 sqft with a 300 sqft additional dwelling unit that includes a full bath and kitchenette. This home is well maintained and updated with hardwood floors, granite countertops, high ceilings, and two fireplaces. Outside is a partial wrap around deck with a hot tub. It also includes a 24 hour backup battery in case of power outages. It's vicinity near Mission Springs in Scotts Valley puts you in a great commuting location to Silicon Valley

1 Bedrooms, 1 Bathrooms, 730sqft w/ 300sqft ADU

Listing at $749,000

Events in Santa Cruz This Weekend

Capitola Art & Wine Festival

Stroll the festival sipping exceptional wines from 22 Santa Cruz Mountain wineries while admiring the artistic talents of over 100 fine artists. Enjoy live music, be inspired by local dance groups, and street performers. 

Charming Capitola Village is filled with restaurants for every taste and an abundance of boutiques to satisfy a shopper’s dream. Art, wine, music, and fun in the enchanting beach-side setting of Capitola…summer’s last hurrah, and truly a weekend in paradise!

Saturday & Sunday Sep 14 & 15

10 AM -5 PM

Admission is Free