|Seb Frey the Real Estate Guy||
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Why Santa Cruz Real Estate Costs So Much
This article was originally published in the Good Times Magazine, the August 5-11 2004 issue, under the title, "Wishing and Hoping, Five Years from Now."
Last weekend I was sitting at Farrell’s Doughnuts on Ocean Street, waiting for my client to arrive. He was already ten minutes late when my cell phone rang. My client was on the line: “Seb, I’m sorry, I’m running late – it’s bumper to bumper traffic coming over the hill.” I told him I understood, and I’d wait until he got there. After we hung up, I resumed sipping my java, watching the cars pour off Highway 17. Each green light brought a fresh wave of vehicles, spilling onto Ocean Street, in a slow flow towards the beach. It was something I’d seen a hundred times before, but I’d never actually sat and watched it, lost in thought.
As a Realtor®, I am often asked by buyers questions like, “Why is property so expensive? Is this a price bubble? Should I wait to buy until the bubble bursts?” Sitting there watching the people stream into Santa Cruz, it became clear to me in a way it had not before why prices are at these levels, and are likely to rise in the future: people want to come here. Many of the people who visit Santa Cruz would love to live here – but they feel they cannot afford it. This is the case not just for visitors, but for many long-time residents as well!
Clearly, the income level of Santa Cruz county residents does not support such costly housing. It is the prosperous people of the surrounding areas, seeking the splendors of Santa Cruz, which sustain this market. This is likely to continue, despite the boom and busts of the Silicon Valley. The population of California will keep on growing for the foreseeable future, which will keep demand – and prices- high.
Housing here in Santa Cruz is very expensive today – but it is not going to be less expensive tomorrow. And that is a beautiful thing – if you own property, that is. What is stopping you from owning property? The answer for most folks is going to be the obvious one: money. There are, however, many creative ways to get money. Family, friends, investors, and lenders can all help. It’s a smart move to buy now, with interest rates at nearly historic lows. Five years from now, when you will inevitably hear people say, “I wish I’d bought five years ago!” – you’ll be one of the ones thinking, “I’m glad I did!”