Coastal Homes: Understanding the Market, What Do the Experts Think? [June 2018 Issue]

Q: What changes has Santa Cruz County seen in the second home market?

Santa Cruz County was built up over twelve decades. The decades 1960’s and 1970’s saw a surge of activity in the second home market in the 1960’s and 1970’s.  As UC Santa Cruz grew from 5000 students at its inception 52 years ago to its current enrollment of nearly 18,000, many of the homes have been bought by permanent residents. Staff and faculty positions have more than doubled. However, those buyers are finding they are now competing with the newly rich and the later in life rich second home buyers who are able to pay all cash and can bid up on a property they want.  Money is less important than winning.  The first group of the newly rich are tech workers who already own in Silicon Valley and have enough money for a retreat at the ocean.  They have enough flexibility in their jobs to work from here and there, and they have the disposable income to buy.  They are also extremely busy, so they pick and buy quickly. The later-in-life rich are bringing a significant inheritance to buy a home at the ocean.  The parents of the generation born between the two world wars are dying.  They were a saver generation, and investments increased those savings ahead of inflation.  The heirs are seeing their savings increase to levels that allow them to buy the ocean retreat.  The inland empire second home buyer is still here too.  They want an ocean-side home to escape the summer heat, and though we are less affordable now than when they bought in droves 20-40 years ago, Santa Cruz County is still a destination point.

Empirical evidence of our second home market can be gathered by walking the streets of the coastal corridor.  Homes are shuttered for much of the time, and then they occasionally come alive. A particular street is a mix of permanent residents, rental investments, and second home owners. It is a mix that keeps our market strong and in high demand, side by side. One or two, or all three of these categories are almost always available for sale, but the market for second homes right now may be the strongest of the three, and boasts the most successful buyers in competitive situations.

If you live here already, whether you own or rent, count yourself lucky. We get to be here all the time ~ the second home buyers have to go back to their first homes. Their situation is enviable, but I still say we have the advantage given we get the Santa Cruz lifestyle more often.

David Morrell ~ Realtor
C21 M&M and Associates
License #01301485
828 Bay Avenue, Capitola, CA 95010
831-239-1255 | www.DavidMorrellSC.com
Hardworking, professional, enthusiastic, and experienced.