Quick Take
Inventory and sales were up in July both over the previous month and over July 2024 as the busy summer for Santa Cruz County’s housing market continues. Real estate professionals say the market is shifting more in favor of buyers, even if it hasn’t quite gotten there yet. They look ahead to the fall, which is typically slower, to better gauge the economy and see if the Federal Reserve makes any major moves.
Santa Cruz County’s housing market had a largely busy late spring and summer, and July was no exception. There were plenty of homes on the market, and many getting sold. Real estate agents say the market is showing signs of balance, favoring buyers more than in recent years.
Home sales rose nearly 8% in July compared to a year ago, while the median price was lower than in July 2024, down about 13%, to $1,183,000 from $1,362,500. The number of properties listed for sale rose over last month, too, adding to an already robust inventory, especially in recent years.
“I’m calling it an ‘almost buyer’s market,’” said Sereno Group agent Jennifer Watson, adding that while the high inventory gives prospective buyers more to choose from, homes on the market are still going fairly quickly. “It’s about six months of inventory for a buyer’s market, and we’re at over four months right now.”
Monterey Bay Mortgage advisor Scott Goodrich stopped short of calling it a buyer’s market, but agreed that the conditions are more favorable for them than even earlier this year.
“Buyers have a little bit more selectivity and time to work with,” he said, adding that all-cash offers are still happening, but the pace has mellowed out. “You’re seeing longer escrow periods and just not that same frenetic pace.”
Because sellers are also frequently moving and buying another property, Goodrich said that they are often wearing “two hats at the same time,” which can inform one’s decision on when to put a home up for sale, especially as more prospective buyers enter the market.
The 552 homes up for sale in July was the highest level for the month of July since 2019, when there were 600 homes for sale. May and June saw similar trends, with their respective inventories also reaching the highest levels since 2019 or earlier. More than 500 homes on the market is considered a generally high level for the area. While the market is still busy, the heightened inventory makes many properties more attainable.
“If it’s a really nice home in a nice neighborhood, those are commanding some multiple offers,” said Goodrich. “But you’re seeing fewer of those situations overall.”
There were 142 home sales countywide in July, the highest number in July since 2021, when there were 188 sales in a post-pandemic market defined by extremely low mortgage rates prompting buyers to flood the market.
Properties sold in about the same time as they took in June, averaging 29 days on the market in July compared to June’s 31. That’s a shorter period than properties spent on the market last July, when they averaged 42 days on the market. Still, those figures are all higher than during the peak of the post-pandemic era, when housing sometimes lasted just 20 days or fewer.
The countywide median sale price was lower in July than in the month prior, dropping to $1,183,000 from $1,450,000 — about an 18% decrease. However, the average lot size and home size was much larger in June than in July.
Watson said she has noticed more buyers hoping to find a house with more rooms, allowing people to customize their home the way they want to. That can mean converting an unneeded bedroom or unused dining room to an office, workshop or entertainment room.
Watson also said that out-of-area buyers still make up a large proportion of people in the market, including those who work remotely in the Bay Area and people even farther away interested in a vacation home or second property. She recalls a family from Stockton who purchased a house in Felton that they live in part-time and call their “beach house.”
“We’ve got the cool factor living over here, literally and figuratively,” she said. “It’s a slower-paced lifestyle, which many people and the people that are here love. We’ve got both local demand and the lifestyle movers.”
Fire concerns and difficulty with securing fire insurance haven’t deterred people from seriously considering — and purchasing in — mountain communities, Watson said.
“The people that are out there looking have made that commitment to looking,” she said. “[Insurance] does come up in the process, and it may be a secondary thought for them, but I don’t think it’s driving it.”
As the summer’s end draws closer, Goodrich said he’s going to pay attention to inflation and possible tariff impacts on people’s financial situations, since it might still be too early to fully understand the effects. He also said that the Federal Reserve is set to meet in September in a “highly anticipated meeting,” given that President Donald Trump has put strong pressure on Jerome Powell, the Fed’s chair, to cut rates: “There’s never a dull moment in real estate.”
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