Home prices in county rise significantly amid pandemic, with Santa Cruz median price topping $1 million
The county recorded 255 sales of single-family homes and condos in December 2020. The median price came in at $797,000 — up from $725,000 from the year before. That’s a nearly 10% increase. Read how your community fared in this story.
Santa Cruz County’s median home sale price increased 9.9% from December 2019 to December 2020, reflecting a pandemic housing boom nationwide that experts say is in large part driven by rock-bottom mortgage rates and people seeking out more space.
In all, the county recorded 255 sales of single-family homes and condos in December 2020, according to data released this month from real estate firm DQNews and property information provider CoreLogic, which tracks property sales across California. The median (middle) price came in at $797,000 — up from $725,000 from the year before.
In Santa Cruz proper, there were 76 sales — with the median price increasing 18.8%, to just over $1 million — from the year before. That’s the highest median price countywide.
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Watsonville recorded the highest increase on a percentage basis. The median price for 45 sales there was $558,000 — up 29% from the year before.
Real estate agents and other housing experts say the pandemic has supercharged the market both locally and nationally. People with higher incomes who are most likely to buy a home in the first place have been relatively unscathed by the economic downturn. And some are looking for more space as some workplaces remain closed.
At the same time, mortgage interest rates have dropped to record lows, in part because of a Federal Reserve policy designed to stimulate the economy. The drop has enticed more buyers into a market in which they’ve found few homes for sale, prompting bidding wars.
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Of the nine largest communities in Santa Cruz County tracked by DQNews and CoreLogic, only Capitola and Ben Lomond saw decreases in the median home price year over year. Both communities also experienced relatively low numbers of sales in December, so the numbers might not be as meaningful as they are in communities where larger numbers of sales occurred.
A breakdown of the communities:
- In Aptos, where 37 sales occurred in December 2020, the median price rose 12% from a year earlier to $955,000.
- In Ben Lomond, where only six sales occurred, the median price decreased 6.3% from a year earlier to $730,000.
- In Boulder Creek, where 21 sales occurred, the median price rose 14.6% from a year earlier to $599,000.
- In Capitola, where 11 sales occurred, the median price decreased 20.5% from a year earlier to $700,000.
- In Felton, where 11 sales occurred, the median price rose 13.7% from a year earlier to $653,500.
- In Santa Cruz, where 76 sales occurred, the median price rose 18.8% from a year earlier to $1,035,000.
- In Scotts Valley, where 28 sales occurred, the median price rose 0.4% from a year earlier to $908,750.
- In Soquel, where 10 sales occurred, the median price rose 22.2% from a year earlier to $995,000.
- In Watsonville, where 45 sales occurred, the median price rose 29% from a year earlier to $558,000.
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Some experts say home prices will see a smaller rise this year than in 2020, after the rapid double-digit price increases of recent months.
Selma Hepp, an economist at CoreLogic, said it’s too early to know whether price gains are in fact slowing down. It’s not uncommon for the median to fluctuate month to month, and real estate agents still report bidding wars. “It continues to be a very strong market,” Hepp said.
Just how long the rapid increases in prices and sales may last nationwide depends on several factors, including the direction of the economy and whether there is a surge in foreclosures after the end of homeowner protections, which were instituted to help people weather the pandemic.
It’s also unclear how much of the current boom simply reflects sales that were likely to have happened anyway but were accelerated.
The upswing in the for-sale market is in stark contrast to the rental market, where tenants have disproportionately been hit by job or income losses and are struggling to make ends meet. The contrast underscores how the COVID-19 pandemic has exacerbated economic disparities in California and in the U.S. as a whole.
Many low-income renters are behind on rent and worry they’ll eventually face eviction during a pandemic that has killed more than 400,000 Americans.