Housing data: High demand, less supply

High demand. Not much supply. Ever-higher prices.

So remains the housing market in coastal California and Santa Cruz County, where, despite state legislation that seeks to create more supply for beleaguered would-be homeowners, and renters, the situation remains dire.

The number of houses for sale in December sank to historic lows in most of the region, dropping 22% in San Francisco and the East Bay and 32% in the South Bay from the previous year, according to Zillow data.

In recent weeks, only about 700 single-family homes were up for sale in San Mateo and Santa Clara counties – less than half the number of a year ago for a population of nearly 2.7 million people, according to the Bay Area News Group. The median price of a single-family home in the nine-county greater Bay Area hit $1.2 million in December, up 13% from 2020.

For all of Santa Cruz

County, Zillow data shows 86 single-family homes for sale countywide (with 255 housing units overall for sale including mobile homes and condos) and listed the county median price at $1,154,443 – up 21.9% over the past year. The internet data firm predicts prices will rise 13.5% in the next year. Zillow lists 60 single-familyhomes for rent in the county.

Those prices are on the low side for the more in-demand areas of the county, such as Santa Cruz’s westside, Capitola and Aptos.

For the city of Santa Cruz, the median listing price was $1.3 million at the end of December. There are 24 single-family homes listed by Zillow for sale.

For Capitola, the median listing price was also $1.3 million, up more than 40% year over year. There were three single-family homes listed for sale, according to Zillow.

In Aptos, the median price was $1.4 million. There are six single family homes listed on Zillow for sale.

How about Watsonville, long considered the “safety valve” for prospective home buyers? Well, there are 23 single-family homes listed for sale, and a median listing sales price of $857,000.

Not exactly affordable to most working people. And it’s why local policies and attitudes toward housing have to change, unless we want our community to inexorably slide into becoming a wealthy enclave.

Home inventory has been tight for decades, as home construction has lagged far behind demand and the booming economy just over the hill from Santa Cruz County has fueled much of the buying demand in recent years.

The situation is unlikely to change anytime soon with a relative lack of available land, difficult zoning rules and regulations, high fees, and the everpresent NIMBYism that has long prevailed when “affordable” housing projects are proposed.

Meanwhile, many would-be sellers are not that for a number of reasons: pandemic concerns, waiting for home values to increase even more and the reality that even should they sell for a high price they would likely be priced out of the local market for a replacement.

The real-estate industry benchmark is for at least a three-month inventory of homes for sale – roughly the measure of how long it would take for all the available homes to sell. That inventory would give buyers multiple choices and sellers enough opportunity to move.

But in our region, inventory in December slipped to less than a month, according to the California Association of Realtors. The lack of supply continues to drive prices to record highs, even in these normally dormant winter months – and continues to create multiple offers on desirable properties, as buyers have to adjust to fewer choices and settling for less while paying more.

It’s no secret that many, if not most, first-time homebuyers have long been priced out of the local market. Rentals, even with UC Santa Cruz classes currently online, also remain at a premium.

Nor should it be surprising that frustrated younger families have either dropped out of the local housing wars, or are contemplating a move somewhere more affordable. And, no wonder that homelessness continues to be a social and moral issue seeking a solution, while the character of this progressive-liberal community arcs far from inclusion.