Whether you’re looking to rent or have been renting in Santa Cruz recently, it'll likely come as no surprise to you that rental prices have skyrocketed over the past few years. It comes down to the fundamental principles of economics. When demand is high and supply is low, prices will trend higher than usual. Unfortunately, this doesn’t bode well for students, seniors, singles, and small households.
Recent market statistics shows that in July, the median home price was $725,000, and around 44% of homes on the market were priced at over $1 million. On the bright side, that means somewhere in the remaining 56% of the market there are affordable homes—you just have to look for them!
Are You Student Looking To Rent In Santa Cruz? Consider Buying A Home Instead
With the beginning of the semester right around the corner, right now is the busiest time of year for students looking for a place to live in September. The idea of buying a home might be a bit daunting at first, but it could have serious payouts in the long run.
Take this home for example: a four bedroom, three bathroom home for sale in the in the western portion of the city, with a mere 15-minute commute to the University of California in Santa Cruz.
- Home cost: $559,000
- Mortgage payment: $2,974
- Mortgage duration: 30 years
- Interest rate: 5.5%
If you bought the home and chose to split the mortgage payment between three out of four bedrooms, your renters would cover the mortgage payment and you could live in the home for free. If you charged a little bit more or contributed a little bit yourself, then you could subsequently pay down the mortgage faster. Once you’ve completed your studies, you’ll have already started building some equity and could choose to either sell or continue to rent out the home.
With some single-bedroom units renting out at $1,600 per month, you'd be saving nearly 38% if you bought the home mentioned above, instead of renting for this price.
Investing in Santa Cruz Real Estate
Whether you’re currently a renter or homeowner and are looking to purchase an investment residence, homes for sale in Santa Cruz are an ideal choice. If you're looking to rent out the home, now is an even more ideal time to buy. With such a hefty demand for rental properties, it should be easy to find great renters so you can start paying down the home almost right away.
The above calculations have been simplified to give you an idea of what could be accomplished if you find yourself crunched by the rental squeeze. If you’d like to learn more about buying investment homes in preferred rental communities, and I’d be happy to discuss them with you.
Questions About Santa Cruz?
We're experts in the community and real estate market of Santa Cruz—this is where we live, work, and play. So let us know your questions about our community and county and we'll be happy to fill you in on all you want to know!
Lauren Spencer has consistently been voted best local REALTOR in Santa Cruz and is always happy to offer her advice and expertise. Call her at: 800.226.4717.
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