Santa Cruz is still a Bargain Compared to Silicon Valley

[Dax Nollenberger]

Historically, Santa Cruz County trails both San Mateo and Santa Clara County in nearly every major real estate metric. Since 2012, the yearly median growth is about 12% per county but the counties of San Mateo and Santa Clara had a higher starting median price and therefore have gotten exponentially more expensive. 

For one reason or another, Santa Cruz has managed to trail many California coastal markets over the years. Anyone analyzing the coast could have seen the intense value rise since the housing crash. Proximity to Silicon Valley is certainly a driver. That was only exaggerated once Covid-19 hit. The new work-from-home norms, the relative affordability, and the draw to the coast made Santa Cruz a really attractive option for Silicon Valley buyers. That's where the majority of our buyers over the last 2 years have come from. 

So, back to the comparing counties. While growth has been similar, the higher price points in San Mateo and Santa Clara counties meant that, from a dollar perspective, those counties continue to get more and more expensive relative to Santa Cruz. In 2012 the difference between the median home price in Santa Cruz County and San Mateo County was $185,000. Now it's $600,000. For Santa Clara County the difference was $50,000 and now it is $480,000. This is where buyer psychology comes into play. From a Silicon Valley buyer's perspective, Santa Cruz is considered relatively affordable. This has been a major cause of the ever-increasing price to list ratio here on the coast. 

Santa Cruz is catching up. From a percentage change perspective, Santa Cruz has seen the most growth each of the last four years. In 2019, the median home price in Santa Cruz was 40% less than San Mateo County, now it's 32%. 

So, from a growth perspective, it would be fair to anticipate a continued outperformance of Santa Cruz County real estate as compared to the Silicon Valley markets because work-from-home/telecommuting is here to stay and why not live near the beach FOR LESS? For many buyers in Silicon Valley, the choice has been an easy one. 

Thinking about making the move to the coast or just have questions about Santa Cruz real estate? Reach out!