Quick Take
Inventory stayed high in Santa Cruz County in June following May’s big jump, and while sales were similar to the figures from May, some real estate professionals say that the market hasn’t been quite as busy as they were expecting. That’s due in part to the inventory, along with the fact that mortgage rates didn’t fall as some hoped, plus persistent concerns surrounding layoffs and economic instability.
Santa Cruz County’s housing market saw its May business carry over into June, with plenty of homes on the market and a lot of them getting sold, too. Despite that, some real estate agents say that the summer hasn’t been quite as busy as they had hoped, as buyers take longer than usual to close on sales.
Home sales rose 16% in June compared to a year ago, while the median price was lower than in June 2024, down about 9%, to $1,450,000 from $1,595,000. The number of properties listed for sale also rose slightly, adding to what agents say was already a lot of inventory on the market.
Sereno Group agent Jennifer Watson said the numbers reflect a market “about on par” with her expectations, albeit slightly slower. She was looking forward to a noticeable drop in mortgage rates, but they stayed right around 7%, potentially keeping some buyers on the sidelines.
“I was hoping that the rates might do a quick little dance down so that more people, especially buyers that have been waiting, would say now’s the time,” she said. “But it’s a slow process a lot of the time, so if we see an extended dip in the rates, then that might happen.”
Monterey Bay Mortgage advisor Scott Goodrich called the market “a little bit more relaxed” than in recent months. He said he spoke with a realtor over the weekend who hosted an open house for a condo in Santa Cruz and said that very few people came through. Goodrich agreed that mortgage rates stagnating at around 7% keeps some buyers hesitating to make a purchase while they hope for rates to drop, but said that other factors are also playing into it.
“Interest rates aren’t doing anything too exciting, so there’s no rush to jump in there. Inventory levels are higher so you don’t have to jump in like you did six months ago or even three months ago,” he said. “Buyers are in a little bit more of a relaxed mode.” With mortgage rates staying steady and more listings for buyers to choose from, they are taking their time and exploring options for much longer than they would have when inventory was low or when mortgage rates were low in the frenzied post-pandemic market.
The number of homes up for sale rose slightly again in June, up to 532 from 523 in May, which was the highest level for the month of May in at least six years. More than 500 homes on the market is considered a fairly high level for the region, and the number of properties on the market in June was the most in any June since 2019, when there were 552 homes on the market.
There were 130 home sales across the county in June, compared to 112 in the same month last year, a 16% increase. That was well below June 2023, though, when the county saw 150 home sales.
Properties sold in about the same time as they took in May, averaging 31 days on the market in June compared to May’s 29. That’s very similar to the amount of time that properties spent on the market last June, when they averaged 32 days on the market. All of those figures are much higher than during the peak of the post-pandemic period, when houses sometimes lasted only 20 days.
The countywide median sale price was higher in June than in the month prior, jumping to $1,450,000 from $1,361,000 — about a 6% increase. However, the average home size and lot size were much larger in June than in May.
For people looking to purchase a home, “there’s definitely some leeway there now, which there didn’t used to be,” said Watson. She stopped short of calling it a buyer’s market, but said she can’t deny the extra power that buyers have right now: “If a seller can hang onto the property for a few months, then you can just wait and see what happens. If you’re going to have to sell quickly, you’re probably going to lower your price.”
Watson added that the market is approaching a sort of “sweet spot” that lies between a buyer’s market and a seller’s market. That means that sellers are realizing they will likely take longer to sell their house than they might have thought, while buyers can negotiate price and possible fixes to a property before committing to a purchase. Adjusting a price or relisting a property can be daunting for both agents and sellers: “A lot of realtors that came into the market during the pandemic never had to talk to their clients about that.”
One thing that has carried over from the pandemic era is all-cash purchases. Watson said that currently, around 30% of county sales are all cash, which is a little higher than it has been over the past year.
Goodrich said that while the current market is “relatively unique,” in that it is more favorable to buyers than in recent history, the worries that have pervaded the minds of buyers for the better part of the year persist: fears surrounding job stability and stock market uncertainty, to name two of the biggest. He is looking ahead to mid-July, when the latest consumer price index report is released.
What that shows could dictate where the market shifts in the coming months, he said: “If they are showing signs of inflation, that’s going to be a negative for the stock market and the bond market, pulling interest rates higher, actually.”
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