The Santa Cruz County Housing Market in 2008

Will Santa Cruz County succeed in "bucking the statewide housing trend"?

According to Sentinel staff writer Jondi Gumz, some say it can:

"Santa Cruz County is expected to bypass the statewide housing trends in 2008.

Alan Nevin, economist for the California Building Industry Association, said his statewide prediction for smaller homes and lower prices might come true in San Luis Obispo but not in Santa Cruz.

'The problem in Santa Cruz is supply,' said Jeff Becker of DMB Associates in Hollister and association chairman. 'You're not going to see smaller homes there at lower prices. Builders can build larger and always have a buyer.'

The CBIA forecasts 2,200 housing starts in the Central Coast area, which runs from Santa Cruz to Santa Barbara counties. From 2002 to 2005, an average of 4,581 single-family homes got permits; the number dropped to 2,000 in 2007. Multifamily homes, often less than 1,000 units, are not a significant factor.

Between 2,000 and 3,000 new jobs are projected in 2008, a slight improvement over 2007, but down from 7,000 in 2005.

Here's what locals expect:

Jeff Talmadge, Aptos builder: 'I think pricing from trade contractors will be lower this year than last year. I have had some of them tell me they will be more aggressive about going after more types of work than in the past. There have been more instances of contractors who are based over the hill competing for jobs here in Santa Cruz than I have ever seen before. From an environmentalist's standpoint, I like to see homes heading toward being smaller.'

Dennis Norton, Capitola land-use planner: 'Nothing new is coming down the pike. I think it's going to be a slow year. The business in Santa Cruz is remodeling; compared to new homes, the ratio is 10 to 1 or 6 to 1. The only people building are on the high end, people who aren't affected by the economy. A third of my clients are like that. They're from over the hill. One paid $2.7 million for property in Pleasure Point, tore down the house and will probably spend $2 million to build. As for smaller houses, I don't see that. That may be true in the spec business but nobody is in the spec business now. Maybe the condos under construction on 41st Avenue. They just started framing on that project.'"