Scenic Santa Cruz County

Rick Wilkins has been a Real Estate Professional since 1975. He received a Broker's License in 1986. He has been a leading sales agent, was the managing broker of 15 agents and has managed many land develop- ment projects. For a complete Bio and Resume please

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Santa Cruz Housing Market 1975 to Present

Santa Cruz (Holy Cross) began in 1791 with the founding of Mission Santa Cruz on the high ground overlooking the San Lorenzo River. By 1900 Santa Cruz developed a thriving economy based on fishing, Redwood logging, lime processing, agriculture and tourism.

Today, in addition to these, the University of California at Santa Cruz and high technology have greatly augmented the economy and transformed Santa Cruz from the sleepy coastal town of the pre-sixties era. Housing in Santa Cruz County has become among the most sought after and highest priced in the United States. The most important reason for this is that Santa Cruz has become a bedroom community to the "Silicon Valley", the heart of the high tech world, 30 miles "over the hill" in the Santa Clara Valley.

Additionally and significantly, if I may go back to the first years of my real estate career, in 1978 voters in Santa Cruz County passed "Measure J", a slow (housing) growth initiative. This, together with very limited usable land available to develop, and continued (population) growth, led to an undersupply of housing for the community.

In 1975 the average priced home in Santa Cruz was approximately $25,000. By the end of 1976 prices were moving upward and by 1981 the average home was about $110,000. In 1982 the home loan interest rate went as high as 21% and caused sales to dramatically slow, with owner financing being the primary financing method until the market recovered in 1983-84. The average price decrease from 1981 to 1983, except for scattered distress sales, was just 5% to 10%, depending on location and overall appeal of the property. By mid 1989, the peak of pricing before the 1989 Loma Prieta Earthquake, the average price home had risen to $250,000. After the earthquake, from September 1989 to 1995 sales volume slowed and prices moderated slightly, stabilized and then, by 2005, rose to an average of approximately $750,000. Since the last quarter of 2005 various market segments, due to very marginal lending and overly agressive investing practices, have been in crisis, with some cities and regions in the U.S. experiencing dramatic price decreases, foreclosures and inventory buildup. The hardest hit cities in California are Stockton, Merced and Sacramento.

While a few areas of Santa Cruz County, due to a significant number of sales that included sub prime loans, have been significantly impacted, most notably Watsonville, the majority of Santa Cruz County, though sales volume has been down, has experienced variable price declines, with changes in value from modest declines for prime properties, to larger decreases for less desirbale and foreclosure properties. My view is that desirable residential property in average to good locations & income producing property in Santa Cruz, due to continuing historically low interest rates, strong rents and Federal Government and private lender programs to stabilize the housing markets, will likely have relatively small losses in value, and stability, with an upward price trend sooner than overall statewide and national housing markets.

Senior Real Estate Specialist