Quick Take
Santa Cruz County’s housing market took a typical jump in March as spring draws closer, but economic fears are still at the forefront of buyers', agents' and advisers' minds as stock markets remain unpredictable. Many prospective buyers can still enter the market now, but even experts are not sure how things will play out as the year goes on.
Santa Cruz County’s housing market saw a big jump in sales in March. And while it isn’t uncommon to see the market heat up as spring takes hold, real estate agents and mortgage advisers continue to keep a close eye on an erratic economy. While many buyers in the market have not changed their course, those in the industry say that if the stock markets continue to perform poorly, buyers could begin freezing up.
There were 93 home sales countywide in March, compared to 67 in the same month last year, a 38% increase. However, the 93 sales were about on par with the 96 sales in March 2023. Aptos, Santa Cruz and Watsonville — the county’s usual hot spots — again saw the most transactions.
The countywide median sale price was up about 14% in March compared to the same month last year. It clocked in at a little over $1.4 million, up from $1.25 million in March 2024.
Although the data from March reflect a typical jump following February as the weather warms, Coldwell Banker Realty agent Jessica Wallace said that the market has been fairly hot since January, likely due to less rain and generally nicer weather.
“The spring market really started in January this year,” she said. “It was so busy because people could prep their homes, paint, and others felt like going to open houses.”
Even so, Wallace said that economic volatility is a big point of focus for agents, buyers and sellers. President Donald Trump’s tariff wars and sweeping federal layoffs have noticeably affected the national economy since his return to office. This week, stock markets fell yet again, and the U.S. dollar hit multiyear lows against the Euro and other major currencies.
Wallace works mostly with sellers and said they are surprised to find fewer offers for their homes and to see their properties spending longer times on the market. That has been typical in the post-pandemic era once interest rates began to rise sharply. She added that it’s difficult to predict how the economy will affect the housing market, as the effects simply aren’t evident that quickly.
“We’ve just got to settle in, people need a place to live and people also have to sell their homes for a lot of different reasons,” she said. “We will continue to do both. We’re not doing it at record pace like we did during 2021 and 2022, and that’s fine, but the market is still moving.”
Wallace also said that while currently, the demand is keeping up with the supply and keeping prices high, there are indicators that prices could begin to drop. The number of homes on the market across the county is much higher than it has been recently — there were 367 homes on the market in March, up about 45% from February and nearly twice as many as the 185 available for sale in March 2024. Wallace said she isn’t entirely sure why inventory is as high as it is currently, but factors like selling inherited houses and downsizing are always big reasons why properties hit the market. She added that it’s possible that some homeowners noticed more properties hitting the market and decided to sell as well because they would have an easier time finding a new home to buy compared to when the housing market is tight.
With more choices, Wallace said that the buyers she does work with come to her organized and committed to what they want rather than just dipping their toes in the market and seeing what could work. During the frenzied, pandemic-era market, buyers with a lot of cash could waive some of the requirements usually necessary to close on a mortgage, like inspections, appraisals and title searches. With properties sitting on the market for longer these days, buyers can enjoy a bit more flexibility, and can make offers without waiving those contingencies.
Properties sat on the market for an average of 42 days in March, and most months in recent years clock in at the 40-to-50-day range. That’s much longer than during the frenzied pandemic-era market, when houses only sat on the market for around 20 days, and sometimes dipped even lower. With homes taking longer to sell, the rush of new listings contributes to inventory staying higher for longer.
“It gives them more time to think about the process and inspect the house, and they can have a second showing before they make an offer,” she said. “That’s really good for buyers right now. They feel a little bit less rushed, more comfortable making decisions, and sometimes can negotiate on the price.”
Monterey Bay Mortgage adviser Scott Goodrich said an erratic economy isn’t deterring people from entering the market yet. He said he was recently working with buyers who sold their home in Scotts Valley within the past month and plan to move to the Santa Rosa area, approaching the move like many others have in recent years: enter a mortgage on the current higher post-pandemic rates, and explore refinancing if and when rates drop.
Goodrich said market activity in other areas can inform how things could play out here, too. While visiting his mother in Saratoga recently, he said they went to an open house that was “jam-packed with folks” and was listed at $3.9 million. It ended up selling for close to $4.5 million. He viewed that as a sort of litmus test for the market in Santa Cruz and beyond.
“That gives me an indication that the supply-and-demand dynamic is so strong that, even with all the commotion in the financial markets, at this point, it’s not disrupting the real estate market,” he said. “When the right property comes along, [buyers] are eager, and I don’t see that changing too much right now.”
However, Goodrich said that if the economy remains unstable for months on end, things could change. Many people use their stock portfolios for things like down payments, and if the value of those assets continues to erode over time, it could “rattle people to the point that they may just not have those funds they thought might be available.”
He said the Trump administration’s tariffs aren’t likely to make it easier on homebuyers, since rising costs from tariffs make it more difficult for the Federal Reserve to lower interest rates. Trump has demanded that Federal Reserve Chair Jerome Powell lower interest rates and threatened to fire him, which experts fear could destabilize markets and raise mortgage rates. “It’s very interesting times that folks considering buying a home are facing,” Goodrich said. “They’re very aware of what’s going on, but they’re just in positions where they can still do what they want if they really come across a property that they really want.”
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