Santa Cruz Housing Market Forecast: Will it Crash in 2024? – Norada Real Estate Investments

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The Santa Cruz housing market is a dynamic and competitive landscape that reflects the unique characteristics of this coastal city. Let’s delve into the current house prices and trends in Santa Cruz.

Current Santa Cruz Market Trends

Median Home Prices and Trends

According to Redfin, in the past month, the median sale price of a home in Santa Cruz stood at $1.2 million, reflecting a 20.8% decrease compared to the previous year. Despite this decline, the median sale price per square foot has experienced a 6.0% increase, reaching an impressive $846.


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In November 2023, Santa Cruz home prices witnessed a 20.8% drop year-over-year, settling at a median price of $1.2 million. Homes in Santa Cruz typically spend 48 days on the market, mirroring the duration from the previous year. However, the number of homes sold in November saw a significant increase, with 28 homes changing hands, compared to 19 homes in the same period last year.

Market Competitiveness and Dynamics

The Santa Cruz housing market showcases competitiveness, with some homes receiving multiple offers. On average, homes sell for approximately 1% below the list price, reaching a pending status in approximately 34 days. However, hot homes, characterized by faster sales, can command a premium of about 3% above the list price, going pending in around 21 days.

Migration Patterns: Where are People Moving?

Understanding the dynamics of relocation is crucial in gauging the housing market. In Santa Cruz, 77% of homebuyers express a desire to remain within the Santa Cruz metropolitan area. The most popular destinations among those considering a move from Santa Cruz include Sacramento, Los Angeles, and Seattle.

Is Santa Cruz a Buyer’s or Seller’s Housing Market?

The current dynamics suggest a market that caters to both buyers and sellers. While the median home prices have seen a decrease, the competitiveness and multiple offers on certain properties indicate a balanced scenario. The median home prices in Santa Cruz have experienced a 20.8% decrease in the past year, signaling a decline in the market value.

Given the decrease in median prices and the competitive nature of the market, it could be considered a favorable time for buyers. However, individual preferences and financial considerations play a crucial role in determining the right time to make a property investment.

Santa Cruz Housing Market Forecast for 2024

Zillow serves as a reliable source for assessing the Santa Cruz housing market. The forecast hints at a potential slowdown, but the term “crash” may be too extreme. It suggests a more gradual adjustment in the market rather than an abrupt collapse.

As of November 30, 2023, the average home value in Santa Cruz stands at $1,297,659, exhibiting a modest 0.3% increase over the past year. Homes in this area typically go pending within 21 days.

The market statistics as of October 31, 2023, reveal a median sale to list ratio of 0.993, with a median sale price of $1,296,333 and a median list price of $1,431,167. Notably, 46.4% of sales are over list price, while 44.9% are under list price, indicating a dynamic and competitive market.

Key Market Indicators (Data through November 30, 2023)

  • For Sale Inventory: 109
  • New Listings: 39

Santa Cruz MSA Housing Market Forecast 

According to the forecast for the Santa Cruz Metropolitan Statistical Area (MSA), as of November 30, 2023, a decline is anticipated. The forecast predicts a decrease of -0.5% by the end of 2023, followed by a further decrease of -1.7% by February 29, 2024, and a cumulative decrease of -3.2% by November 30, 2024. This projection suggests a potential slowdown in the housing market in the coming months.

Santa Cruz MSA refers to the Metropolitan Statistical Area encompassing Santa Cruz, CA. This region is situated in California and includes various counties. The housing market in the Santa Cruz MSA is substantial, making it a notable player in the state’s real estate landscape.

Factors Affecting the Market

  • Rising interest rates are making it more expensive to buy a home, which is cooling demand.
  • The economic uncertainty caused by the pandemic is making some buyers hesitant to make a large purchase.
  • The supply of homes for sale is increasing, which is putting downward pressure on prices.

Outlook

  • The Santa Cruz housing market is expected to continue to cool in 2024, but prices are not expected to decline significantly.
  • Homes in high-demand neighborhoods are likely to hold their value better than homes in less desirable areas.
  • Buyers should be patient and prepared to compete for homes with other buyers.

References:

  • https://www.redfin.com/city/17680/CA/Santa-Cruz/housing-market
  • https://www.zillow.com/home-values/13715/santa-cruz-ca/
  • https://www.realtor.com/realestateandhomes-search/Santa-Cruz_CA/overview

This post was originally published on 3rd party site mentioned on the title of this site

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