Santa Cruz CA Homes overlooking the ocean

If you’ve been eyeing the Santa Cruz housing market lately, you’ve probably felt it: things aren’t moving like they used to. Homes are sitting longer. Inventory’s climbing. And buyers? They’re finally catching their breath.

So, what does all this mean? Are we officially in a buyer’s market? Let’s break it down, using the latest numbers—and more importantly, let’s make sense of what it means for you.

More Listings, Less Rush: Inventory Keeps Growing

Back in May 2025, headlines buzzed about a six-year high in inventory. Fast forward to July, and we’ve blown past that. According to FRED, there were 616 active listings in Santa Cruz County in July—giving buyers more options than they’ve had in years.

More inventory means less urgency. The days of “offer the second you see it or lose it” are slipping away. For sellers, this means more competition. For buyers, it’s room to breathe—and negotiate.

Homes Aren’t Flying Off the Market Anymore (And That’s Okay)

Let’s rewind to the pandemic days—homes in Santa Cruz were flying off the shelf in under 20 days. But by June 2025, that median had more than doubled. The Federal Reserve and Trading Economics report that the median Days on Market hit 45 days.

In other words: the market’s cooling. And that gives buyers time to think, compare, and negotiate. You’re no longer being rushed into a decision after a five-minute open house.

Different Speeds, Different Deals: Not All Neighborhoods Are Equal

Here’s where things get interesting—because not all parts of Santa Cruz are cooling equally.

  • Still hot: Places like Westside Santa Cruz, Seabright, and anywhere near the beach tend to move quicker. Demand stays strong in these micro-markets.
  • Slower pace: Rural spots like Felton, Boulder Creek, or parts of Scotts Valley are seeing homes linger. These are the areas where price cuts and seller concessions are show up more often.

This is classic Santa Cruz: hyperlocal, micro-market dynamics. Where you buy (or sell) really matters.

Mortgage Rates Are Still a Hurdle in Santa Cruz

One of the most considerable headwinds in the Santa Cruz real estate market is Mortgage rates.

According to Freddie Mac’s July 31 survey, the average:

  • 30-year fixed sits at 6.72%
  • 15-year fixed is at 5.85%

Yes, that’s slightly down from weeks before—but still miles away from the 3% rates we saw during the pandemic. For first-time buyers, that gap is a dealbreaker. Even seasoned buyers are doing the math twice.

And while the Fed held rates steady at 4.25%–4.50% in their July 30 meeting, there’s no firm promise of cuts anytime soon. Until inflation cools further, affordability will stay tight.

Buyer Confidence Is Still Wobbly

Even with more choices and a slower pace, some buyers are still hesitating—and you can’t blame them. With tariff concerns, inflation, and a shaky job market, many are asking themselves: “Is now the right time?” It’s a fair question. But for those who are ready, the leverage is shifting in your favor.

So… Is Santa Cruz a Buyer’s Market Now?

We’re not fully there yet, but we’re heading in that direction—fast.

  • Inventory is the highest it’s been in over six years
  • Homes are sitting longer
  • Buyers are gaining negotiation power
  • Mortgage rates are keeping some competition on the sidelines

Even Realtor.com’s June 2025 data still showed the 95060-zip code leaning seller. However, across the rest of the county, the momentum is tipping toward the buyer.

Santa Cruz Home Pricing Is Changing—Here’s What Sellers Need to Know

With this shift, pricing strategy matters more than ever. The era of throwing a home on the market and getting 10 offers over asking is over.

  • Price It Right from Day One: Here’s the deal: overpricing will hurt you. If homes in your neighborhood are selling around $1.25M, listing yours at $1.35M with no major upgrades? Risky. It could sit, go stale, and force awkward price cuts. Our Smart Advanced Search Tool can make it easy to run comps. So do it. Set a realistic list price from day one, and you’ll have a much better shot at attracting serious buyers fast.
  • If It’s Not Selling, Drop the Price Strategically: No magic formula—but if you’re not seeing action after 2–3 weeks, it might be time to adjust. Agents often recommend reducing in $25K–$50K chunks to catch new buyers searching in different ranges.
  • Homes Under $1.1M Are the Sweet Spot: In Santa Cruz, homes listed under $1.1M are getting the most attention. That’s where remote workers and first-time buyers are still active—especially with tech incomes and flexible job setups. If you’re selling in that price range, pricing competitively could help you move quickly.

If Your Home’s Sitting—Try This:

  • Re-stage it: Emphasize natural light. Think coastal chic—light wood tones, clean finishes, maybe even a surfboard on the wall.
  • List in the right season: You’ll get more traction in spring or early summer, when families plan moves.
  • Make strategic updates: New paint, modern lighting, or sleek hardware can give your home a refreshed edge.
  • Adjust your price: Dropping from $1.25M to $1.18M or $1.15M might pull in a new pool of buyers.

For Investors: What This Shift Means for You

It’s a double-edged sword. Yes, appreciation has slowed. But rental demand remains strong. With high mortgage rates pushing many would-be buyers into rentals, income properties are looking better for long-term investors.

If you’re thinking hold-and-rent in Santa Cruz County—this might be your moment.

Final Takeaways

Whether you're buying, selling, or investing, here’s the bottom line:

If You’re Buying:

  • More inventory = more choices
  • Less competition = more negotiating power
  • Longer DOM = more time to make smart decisions

If You’re Selling:

  • Be realistic on price
  • Stay flexible and proactive
  • Lean into good staging, smart timing, and thoughtful upgrades

The Santa Cruz market isn’t crashing. It’s just cooling and recalibrating. Those who adapt to the shift—buyers and sellers—will still come out ahead.

Let Paul Burrowes Guide You to High-Performance Investments in Santa Cruz

Paul Burrowes, CRS, CCEC, SFR, NHCP, LHC, REALTOR® Licensed REALTOR® with over 15 years of experience and expertise. Commits to being on time and transparent. Acts as your consultant to ensure you make the best decisions to fit your transaction at every step in the process. Negotiates towards a low-stress, win-win outcome. Handles all the details for you, ensuring the hundreds of steps in your real estate transaction go smoothly. Proudly serving Silicon Valley, Santa Cruz, Monterey, and Santa Clara Counties! | DRE# 01955563 | (831) 295-5130 | paul@burrowes.com.

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