Quick Take:
Looking for refuge in the redwoods, many “people in Silicon Valley wanted to get out of the cities. I’ve been working here since 2004 … and this is the busiest year we’ve ever had,” said one local realtor. A closer look at how and why a fire-ravaged zone remains one of the county’s hottest real estate markets.
A hardy sort of homeowner has always been drawn to Boulder Creek, where real estate prices have historically been held in check by the town’s remote location, winding roads and extremely wet winters.
Power outages and quirky cell reception are commonplace, and last year’s horrifying CZU fire should have been a further drag on housing prices.
Yet home values in Boulder Creek are soaring along with the rest of Santa Cruz County, confounding expectations and squeezing one of the last pockets of affordable housing in the region.
Median prices for single-family homes in Boulder Creek’s 95006 ZIP code rose by more than 33% between July 2020 and July 2021, from roughly $670,000 to $895,000, according to data compiled by Multiple Listing Service. The average price in July 2011 was just $333,000.
Boulder Creek prices over the past decade
Open house events continue to be swamped by prospective buyers, with bidding wars pushing sales well above asking prices. The 95006 area — which includes a swath of remote mountain land outside of Boulder Creek proper — has a population of about 8,979, according to the U.S. Postal Service.
The CZU fire, which incinerated more than 900 of approximately 4,520 homes in the area, came in the midst of the COVID-19 pandemic and widespread economic uncertainty. Real estate professionals were braced for a pricing bust in Boulder Creek, and startled to experience a record-breaking surge in business instead.
“I thought the (CZU) fire would dampen prices, but that didn’t happen,” said real estate agent Mark Thomas. “Some buyers do recoil at the (fire) risk, but there’s so much demand, so many people in line to buy. It’s so hard to find anything reasonable in Santa Cruz, or anywhere else.”
Some of Thomas’s clients say the pandemic has reordered their life priorities, elevating the desire for homeownership. Some families have pooled resources to create multi-generational living situations on large rural properties. But political and social unrest have also fueled the hot seller’s market.
Agent Jayson Madani said last summer’s protests and other political violence sent a wave of buyers looking for a refuge in the redwoods.
“When the riots happened, my phone just started ringing — I was hearing from 20 buyers a day,” said Madani. “People in Silicon Valley wanted to get out of the cities. I’ve been working here since 2004 … and this is the busiest year we’ve ever had.”
The new buyers are mostly technology workers from Silicon Valley, and Madani says they are not discouraged by the area’s glitchy utilities and narrow, windy roads. “People are putting in multiple Tesla (Powerwall) home battery systems, and waiting for Elon Musk’s Starlink system (for internet),” he said. “They’re buying with the expectation of faster connections, soon. And some people like to cruise Highway 9 and Skyline (Boulevard) in their Teslas.”
Unfortunately, locals are unquestionably being outbid by the deep pockets and all-cash offers from high earners at firms like Google, Apple and Netflix. “It’s hard to take those calls from locals,” said Madani. But he noted that tech buyers tend to bid on large, pristine and fully staged houses, ignoring modest homes and fixer-uppers.
And that pool of modest homes is actually substantial, as most mountain homes were built between the 1930s and 1960s, and many were designed to be summer cabins. There are still relative bargains to be had for buyers with home-repair skills and those willing to live in smaller homes. And while local buyers are struggling, local homeowners are reaping the windfall from exorbitant home prices.
The perceived influx of new money rankles some locals. But watching city folk come and go is a time-honored cycle in the mountains, where full-time residents generally know how to stoke a wood stove, get by for weeks without power, and fire up a chainsaw.
Madani said he has had clients who fled back to Los Gatos after a year in the hills because they couldn’t handle the roads. One city transplant (who will remain unnamed) admitted he once popped into his rural fire department to report a dead skunk on the road, thinking the firefighters would somehow “take care of it.” The firehouse staff just stared at him, incredulous, until he left.
But that transplant eventually figured out how to become a local, and how to dispose of a dead skunk. There’s a learning curve to living in the mountains, and only time will tell if this year’s newcomers will love it or leave it.
Boulder Creek land broker Deborah Donner, of Donner Land & Homes Inc., thinks that newcomers and longtimers mostly have something in common: a love of the mountains and a dream of building an authentic life here.
“I think it’s cliched to see tech people as ‘the other,’” said Donner, who has lived and worked in the Boulder Creek area for more than 40 years. “Whether you’re a nature-loving millennial, a mom-and-dad family, a hippie or an engineer, people who come to the woods have a common dream — to live outside of the box and enjoy fresh air and big trees. They’re outliers looking for a better life, and I don’t think that has changed over the years.”
THE COST OF SANTA CRUZ LIVING
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