Santa Cruz & mountains Real Estate Market Report April 2019



The 1st quarter trend reflected continued price softening across all regions.     To answer the question, “Is this a bubble popping,” I think not: CoreLogic reports serious mortgage delinquencies are at the lowest rate in 18 years.     After several years of rapid price appreciation, I believe this softening is healthy for the overall housing market.    Real estate is cyclical; the last trough in prices was nearly ten years ago in 2009.    This kind of soft landing is preferable to a repeat of the “great recession.”

I expect the number of home sales will pick up once the rains dissipate.   The rate of sales slowed down in the 1st quarter due to seasonal factors plus rising interest rates.    Recently, the Federal Reserve made a rare announcement that they intended to keep img059interest rates flat due to slowing global economic conditions: in response, the rates on mortgages have dropped to their best levels in quite a while, appealing to buyers who’ve been waiting for favorable conditions.    Consumer confidence is increasing, and the schedule of IPOs (Initial public stock offerings) in the SF Bay Area promises to bring new wealth to the area.    Some of that wealth will inevitably funnel into real estate.

As you look at the price chart, remember some of these micro markets (like Brookdale & Lompico) have so few home sales, that percentage changes aren’t statistically significant and average prices can be dramatically skewed when one of the few sales exceed a million dollars.    It’s more useful to look at the San Lorenzo Valley as a whole, where prices were flat compared to the 1st quarter of last year, and dropped about 5% from the 4th quarter of 2018.

Scotts Valley had the largest shift: from 27 home sales over $1 million in the 4th quarter of 2018, to just 12 home sales in the million dollar plus segment during the 1st quarter of 2019.

Santa Cruz County as a whole rose 3% over this time last year, while falling 4.5% since the 4th quarter, following lock-step with Santa Clara County.    Nationally, home prices appreciated just over 4%, compared to February 2018.



These charts illustrate housing inventory over the past three years.   Around six months of  housing inventory is considered balanced between buyers and sellers.   Some sellers take their homes off the market over the holidays and relist them later in spring, creating seasonal lows.   But these graphs show that each region is experiencing a continuing inventory shortage of just two months of inventory.   That means, at the current rate of sales, we’d run out of homes for sale in just two months.     So, listing a home for sale early this year might mean beating the competition when the normal rush of sellers list their homes in late spring.

At the time of this writing, San Lorenzo Valley has 46 single family homes for sale (up slightly from 40 in January but down from 80 in the 3rd quarter.     Scotts Valley has 33 homes for sale (up from January’s 24 homes  and equal to the 3rd quarter).   Santa Cruz, despite having four times the population of Scotts Valley, has 55 single family homes for sale, (up from just 38 in January but down from 68 in the fall quarter).


moss covered wood on forest floorSurprisingly, amid concerns of slow global economic growth, the Federal Reserve announced its intentions to hold interest rates stable, so as a result, interest rates on the 30 year fixed mortgage have fallen to around 4.25%,  (down from 4.6% in January.) Click here to see today’s 30 year fixed rate mortgages rates   Anyone who purchased at recent levels of 5%+ may want to discuss the prospect of refinancing with their lenders.

Economic growth as measured by GDP (Gross Domestic Product) fell to 2.2% in the 4th quarter as international issues weighed.  That was down from 3.4% in the 3rd quarter (4.2% in the 2nd quarter of 2018).    Consumer price increases (a measure of inflation – something the Federal Reserve monitors closely) fell to about 1.5% annually in January (from as high as 2.9% in July 2018).    The unemployment rate is up to around 4%     (from 3.7% nationwide in January).    Wages still haven’t increased as much as workers would hope, but are hovering between 3% and 4% growth.


With average single family home prices of $1 to $1.5 million across the Bay Area, Cherry tree at Eds houseaffordability concerns continue to push people who work in the Silicon Valley to seek affordable housing anywhere within about an hour’s commute.    The San Lorenzo Valley sparkles with some of the most attractive prices anywhere in the greater bay area, within just about a 45 minute to 1 hour commute to most major employers (Apple, Alphabet (Google), Facebook, Netflix…).    For those who prefer a small city, Scotts Valley offers a quick commute, followed by Santa Cruz with its great beaches, shopping, night life and other amenities.


The average Santa Cruz home cost of $1 million could buy for example a 1960s 3 bedroom 2 bath 1500 square foot West Side cottage within walking distance to the beach, or, a  Seabright 2 bedroom 1 bath 1100 square foot home built in the 1930’s.

The Scotts Valley average home price of $1 million could buy a 3 bedroom, 2 bath 2000 square foot home built in 1990 in a great neighborhood, or for a more rural experience, a similar sized 1970’s home on an acre just a few miles from town.

The San Lorenzo Valley average home price of $650,000 could buy for example a 3 bed/3 bath 1600 square foot home built in 1970s on about an acre about 2 miles outside of Ben Lomond, or a 2 bed/2 bath 1500 square foot 1980s home on about 2/10 acre in Felton.


In contrast to Santa Clara County homes, which consistently sold on average within the first month of being listed, San Lorenzo Valley homes take on average 30-60 days to sell: some will sell within the first week or two, while others will take longer than a couple of months to find a buyer.

Lengthening to 50 days on the market, Scotts Valley and Santa Cruz city homes typically took 2-3 weeks longer than previously to sell.    Across the board, homes took about almost two weeks to a month longer to sell in the 1st quarter of 2018 than they did in the 4th quarter of 2018.


People from the Silicon Valley are enchanted to discover Santa Cruz County with all of cropped-pleasure-point-egret.jpgour parks for hiking, climbing, horse-back riding, mountain biking, and skateboarding.    There are dozens of beaches, from popular to serene, walk-in to hike-in, some dog-friendly.   The Santa Cruz lifestyle is informal: we cherish our slower pace.   With 1/3 the population density of Santa Clara County, there’s more room to spread out in Santa Cruz County, and consequently lower stress and crime rates.    (Just 440 people/square mile live here, compared to 1400 people/square mile living in Santa Clara County.)   Many people say they enjoy driving through the mountains to work, versus sitting in traffic and spending a lot more money to live in Santa Clara County.

CURIOUS WHAT YOUR HOME IS WORTH?   Visit  for a quick and easy estimate!    If you’re thinking of selling, I’ll help you evaluate cost effective ways to make your home appeal to buyers.    My customized marketing plan is exceptional: contact me to discover why I have so many repeat clients like these.

Bridge in Boulder Creek, CA
Big Basin Hwy 236 Bridge at Brackenbrae, Boulder Creek, CA

LOOKING FOR YOUR DREAM HOME?     Click here!   I’ll help you secure financing, negotiate with the seller, attend inspections with you, review disclosures and potential red flags, and…hand you the keys!


The advice of a knowledgeable local REALTOR®, who can intelligently discuss neighborhoods and price trends, is invaluable.  Hire a REALTOR® you can trust, who has enough time to dedicate to you!    I will help you untangle the maze of decisions, preparations, negotiations, inspections, title and disclosures as you buy or sell your home.    Relocating? – I can also connect you to a trust-worthy REALTOR® wherever you’re going.   My goal is to make the entire process easier to understand, less stressful, and as cost effective as possible for you.

Minolta DSC
Photo Credit John Urwin

Whenever you have real estate questions,    just text or call MC at (831) 419-9759, or, e-mail me at

I’d love to help you buy or sell your home. Your home is your castle; I’ll treat you like royalty!

Click here to look at homes for sale or sign up for your own custom home alert.

Sources:, Reuters,,, Mercury News, CoreLogic, FreddieMac,     Month to month home sales prices fluctuate widely in small communities and cities, especially when property sales range between million dollar estates and fixer upper properties.   Because of this, percentage and average price changes often aren’t statistically meaningful for short time intervals.      *All stats as of April 4, 2019: single family residences.

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