County home listings reach six-year high for May as market starts shifting toward buyers

Santa Cruz County’s housing market has shown early signs of shifting toward a “buyer’s market,” some local real estate professionals say, with the number of homes listed for sale last month reaching their highest for the month of May in at least six years. 

“Buyers are realizing there is more to choose from,” said Sereno Group agent Jennifer Watson.

Santa Cruz County’s housing market inventory has gradually risen each month of the year so far. It reached 523 in May, a 19% increase from April, marking the first May that the county has had more than 500 homes on the market — a level considered fairly high for the region — since at least 2019. 

Local market-watchers say the rising number of homes listed for sale is in part due to buyers and sellers both adjusting to a market with higher mortgage rates in the 6% to 7% range, more in line with historical norms following the pandemic-era environment of extremely low 2% to 3% rates. Buyers have been taking their time to shop around as a result.

“For years, a lot of buyers got so scared from the pandemic, the multiple offers and over-bidding,” Watson said. “But now, buyers have more time to make decisions and they have a little more skin in the game.”

At least among buyers with whom Watson is working directly, the economic volatility due to tariffs and big stock market swings hasn’t turned off many people from seriously looking at homes — and even buying them. But if sellers have been in the driver’s seat in recent years, then buyers are now “at least beside the driver,” she said. 

Monterey Bay Mortgage advisor Scott Goodrich still views the local market as a seller’s market, but said higher inventory and homes taking longer to sell could spell the beginning of a shift toward a more balanced market: “If this goes on another several months, that is in favor of buyers, no question.”

A Santa Cruz-based real estate agent Goodrich spoke to recently had five listings, all of which were still on the market with quiet open houses. Goodrich says he sees it as a sign of a changing market, as buyers have more options to explore and can take more time before making a purchase. 

Both Goodrich and Watson say it’s difficult to pinpoint a single factor driving the steadily rising inventory of homes for sale and that a variety of conditions are helping to gradually change the market.

It is likely a “snowball” effect, said Watson. Buyers and sellers have both become accustomed to higher mortgage rates, which currently sit in the high-6% range, spurring more buyers to jump into the market, leading to rising home sales. 

There were 124 home sales countywide in May, compared to 110 in the same month last year, a 13% increase and nearly identical to the 123 home sales in May 2023.

Properties sold faster in May than in April, averaging 29 days on the market, compared to April’s 39. That’s similar to the amount of time that properties spent on the market last May, when they averaged 26 days, but it’s still higher than during the fever pitch of the post-pandemic period, when houses were sometimes sitting on the market for fewer than 20 days.

The countywide median sale price in May didn’t change much from the month prior, jumping to $1,361,000 from $1,352,500 — just a 0.6% increase.

With more prospective buyers entering the market, real estate professionals say sellers who might have hesitated to list their homes are now doing so, giving buyers more options and allowing them to take time before jumping into a purchase. 

“We’ve been telling sellers for years and years that if you don’t like where you live now, it’s a great time to sell, because you’re in the driver’s seat,” Watson said. “Maybe they finally listened.”

Economic and political turmoil could also be weighing on the minds of potential homebuyers, Goodrich said: “That’s probably a reason why some are taking a little bit of a step back.”

Both Goodrich and Watson say that watching the job market and unemployment figures is one of the best ways to gauge how the housing market will look in the weeks and months that follow. “You don’t want to buy a house if you think your job isn’t secure,” said Watson.

In April, the Santa Cruz County unemployment rate was 6.5%. That’s lower than the 7.1% figure in March, but slightly higher than last April’s 6.2%.

Goodrich said that watching tech layoffs, specifically, can provide insight into what might happen in Santa Cruz. “Bay Area-wise, that trickles down to this area,” he said. The Mercury News reported earlier this month that the Bay Area has seen more than 11,000 tech layoffs so far in 2025.

And even though willing buyers are still jumping into purchases if they can find a house priced well for them, Watson said that one thing is clear: Fixer-uppers are not in high demand, as the additional cost of any work done on the house could put them outside of a buyer’s price range. 

“They’re wanting homes that are done, and they don’t want to have to do work on them,” she said. “Not having to do any updating or remodeling is something that’s really important right now.”

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