Santa Cruz Beach Home Values

Real Estate Agent with Monterey Bay Properties

Santa Cruz Beach Home Values


Like most areas through out the United States, Santa Cruz real estate has had its fair share of lost value. However some areas in Santa Cruz County like the beach areas have not been hit as hard. For example the greater Watsonville and south county area has been hit a lot harder than the beach areas of Santa Cruz. This is due in part to the higher demand for beach properties and a scarcer inventory of beach homes. But another reason is that there are a lot less bank owned properties for sale in the beach areas as compared to the Watsonville and south county area as seen the chart below.


Overall the Bank Owned Properties represented about 30% of the homes sold thru the MLS in June. But the bulk of those Bank Owned properties sales occurred in the Watsonville and Santa Cruz City areas and most of these properties were lower priced homes and condos.  As seen in the chart below, last month 70% of the properties that sold in Watsonville were Bank Owned Properties as compared to Santa Cruz, which had 18%.  In comparison beach areas like Rio Del Mar and Capitola have had around only around 10%, as Bank Owned and most of those are condos.


Thus as we enter our busiest time of the year for buying a beach home, most Beach Home Buyers are some what disappointed in the drop in prices of beach homes. Many Beach Home Buyers are expecting the same 40% drop in property values that has happened in the interior areas of the county. As the chart below shows, you can see that beach area homes have seen a major drop in prices.  But for several reasons, Santa Cruz beach homes have not dropped as much as other areas.


First there is a much smaller of number of financially distressed properties in the beach areas as compared to the other areas of the county, thus having a lower impact on the home values in the beach areas.  Second the available inventory of beach homes is much lower than usual this year, and this is due to the fact many Beach Sellers are waiting out this bad market for a better time to sell.  Third there is a higher market demand for beach homes, with a lot of out of area Beach Buyers looking for a second vacation home. People just love to live by the beach and have an ocean view.


So there is a lot of good news for Beach Buyers, property values are down and there are some pretty good buys out there. Plus mortgage rates are again near an all time low. If you are a Beach Home Seller there is usually a compelling reason to be selling in this market and this can be good news to the Beach Home Buyer. Lastly when this market turns and it will, beach homes will have the fastest and highest appreciation rate when we recover.  As the old saying goes ‘They only make so much beach property and everyone would love to have one.'


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