Quick Take
The final month of 2024 looked similar to past Decembers, with sales down from earlier in the fall. New listings are already coming down the pipeline, though, which means that a hot market could return sooner than its usual post-Super Bowl appearance.
Santa Cruz County’s housing market saw its typical winter slowdown in December, with home sales falling 24% from November, but local real estate agents are reporting early signals of increased market activity and the potential for more homes to hit the market in 2025.
Countywide, there were 84 homes sold in December, compared to 111 in November, according to the Santa Cruz County Association of Realtors. That represents a 24% monthly decrease — but November was an unusually busy month, ending with the most home November home sales in three years.
The number of homes available for sale was down across most of the county compared to November, leading to fewer sales in most places.
Santa Cruz, Aptos and Boulder Creek had the busiest markets in December with 27, 17 and 11 sales, respectively. Santa Cruz and Aptos fell from 37 and 18 and 37 in November, while Boulder Creek rose from five. While Aptos and Santa Cruz are always at the top of the list each month, Watsonville, the other jurisdiction most commonly seen near the top, saw its sales dip from 16 to seven. The 16 Watsonville sales in November was the highest number of sales there since 2021, when there were 24.
Homes sold slightly faster on average in December compared to November, at 43 days to 45 days, respectively. Properties spent seven fewer days on the market than in December 2023, when the average home took 50 days to sell.
The median sale price of $1,232,500 was up about 17% compared to the same month in 2023, when the median price was $1,049,500. While that appears to be a large jump, December 2023’s median price was unusually low, because expensive jurisdictions like Capitola did not have any sales, skewing the countywide median price down. December’s median sale price was actually lower than those in September, October and November, which stood at $1,486,095, $1,315,000 and $1,300,500, respectively.
Last month, there was just one sale in Ben Lomond, for $1.19 million, compared to the median sale price of $875,000 in December 2023. Capitola, which did not see any homes sold in December 2023, had a median sale price of $1.38 million last month. Davenport’s median sale price was $1.4 million, compared to just over $1 million in December 2023.
Sereno Group agent Jennifer Watson said that while no one factor caused home sales to drop in December, it represented a more typical winter month than November did. She added that several things point to a potential imminent bump in market activity as 2025 begins, even while some challenges remain.
Mortgage rates have largely stabilized after rising sharply in recent years, bringing more prospective buyers into the market, and Watson sees the potential for an imminent crop of new listings that could bring more options to the market. Even as mortgage rates approach 7% once again following several weeks of high-6% rates, that has been a typical rate over the past few years. Watson said buyers have grown accustomed to those figures following extremely low rates around 3% during the pandemic.
“A lot of families are inheriting property and are not sure what to do with it and sell it, and some people are either downsizing or upsizing,” she said, adding that agents are feeling busier so far in January than usual, as market activity doesn’t usually pick up noticeably until after the Super Bowl.
Watson added that she has recently spoken with prospective buyers who have been shopping around for the past few years, and many are cautiously excited about making the jump into buying this year.
“I have some people looking in Corralitos and there’s nothing coming on right now, so they’re being patient,” she said. “They’re thinking now that the rates are pretty stable, and we don’t expect a huge difference this year, so maybe I will go ahead and get the house that’s right for me now.”
However, there are some factors that could drag down the market in 2025, with one of the most notable being the difficulty finding fire insurance. Buyers need to consider the ballooning cost of fire insurance as they plan their budget.
Thousands of Santa Cruz County residents have either been dropped or non-renewed by their insurance companies, and many resort to the often pricey California FAIR Plan — the state’s last option for homeowners seeking fire insurance. Already, Watson said, that has changed the way people navigate the housing market. She noted that while the mountain communities are still popular, finding insurance is now one of the major points of discussion between her and her buyer clients.
“It’s not an afterthought anymore. That’s like one of the first things you need to start doing, besides your loan, is looking for your insurance quote,” she said. “If I’m selling mountain properties I’ll say you need to look a little further or dive a little deeper to get a better rate.
“I’m not saying it’s impossible, but it’s expensive for sure.”
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