Rankings/Santa Cruz-Watsonville, CA

Santa Cruz-Watsonville, CA

NeutralTier 1CBSA 42100Compare

Risk Rank: #177 of 287Month: 2025-12Score change (12m):↑ +26

46score

Composite risk percentile vs 287 metros (higher = higher risk)

Cycle Phase

Santa Cruz experienced a market correction from early 2025 through mid-2025. The market is currently recovering.

Recovery

Expansion

Hypersupply

Recession

In Recovery for 2 months·Previously: Recovery

Market conditions are rebuilding after a correction period

Recovery

Expansion

Hypersupply

Recession

Santa Cruz's housing market shows average risk, ranking 177th of 287 metros. The market recently entered Recovery. Current conditions are balanced with stable liquidity.

Executive Summary

Risk is Neutral, driven primarily by permit growth and price momentum. The market is in Recovery phase. Liquidity is stable and valuation is balanced.

Top Risk Drivers (This Month)

Permit Growth

p99 (highest risk decile)

YoY permit change

Price Momentum

p60 (moderate)

12-month HPI change

Migration

p39 (below average risk)

Net AGI migration (risk inverted)

Market Signals

Inventory is growing at a moderate +7% pace with homes taking +20% longer to sell — within normal ranges.

Liquidity

Stable↓

Active Listings YoY

+6.8%p56

Days on Market YoY

+20.0%p81

Months in status2

Data through Dec 2025

Valuation

Balanced—

Rent vs. Price Growth

-0.6%p56

Months in status44

Data through Dec 2025Rent growth vs price growth (rent support). Note: Affordability and Valuation measure different structural dimensions and can diverge.

Factor Details

Factor Breakdown

Price Momentum60

12-month HPI change — higher = overheating

Permit Growth99

YoY permit change — higher = supply pressure

Permits per Capita21

Permits per 1,000 residents — higher = overbuilding risk

Affordability30

Mortgage payment / income — higher = more burdened

Employment29

12-month employment change (risk inverted)

Migration39

Net AGI migration (risk inverted)

Underlying Values

Metric	Value	Pctile
Price Momentum	+3.1%	p60
Permit Growth	+119.1%	p99
Permits/1K Pop	2.08	p21
Affordability	0.25	p30
Employment	+0.8%	p29
Net AGI Migration	+$40K	p39

National ContextDoes not affect score

Credit Conditions

Credit Regime

Stable—

Healthy recovery. Credit is flowing normally and transactions are steady — conditions favor continued rebuilding.

Bank Lending Standards

-5.7Normal

Rate Change (YoY)

-74 bpsNormal

Mortgage Risk Premium

+189 bpsElevated

Stable for 8 quartersData through 2026-Q1

Supply Pipeline

Supply Regime

Accumulating—

Supply pipeline is building up while credit remains available. New units are accumulating in the system — watch for delivery pressure in coming quarters.

Pipeline Ratio

0.91High

Completion-Permit Divergence

-3.2 ppNormal

Accumulating for 3 quartersData through 2025-Q4

Local SignalsDoes not affect score

Metro Permit Activity

Permit Activity

Surge

YoY Permit Growth

+119.1%Far above norm

Raw signal — not the composite percentile

Relative to 2016–2019 norms for this metro

Based on limited permit volume

Permit activity is surging and demand is absorbing it. Both sides of the market are running hot — monitor for overheating if liquidity shifts.

Liquidity

Stable↓

Active Listings YoY+6.8%

Days on Market YoY+20.0%

AssessmentBalanced conditions

Stable for 2 monthsData through Dec 2025

Internal Structure

County-level structural analysis.

County-level structural analysis is not available for this metro due to fewer than 3 qualifying counties.

Score History

Month	Phase	Score	Price	Permits	Afford	Employ	Migr
2025-11	Rec	21	45	1	29	11	39
2025-10	Hyp	22	30	1	29	28	39
2025-08	Hyp	26	30	1	29	52	39
2025-05	Hyp	22	17	1	27	45	39
2025-04	Ress	23	18	1	27	51	39
2025-02	Ress	20	4	1	27	44	39
2024-12	Hyp	20	12	1	33	31	39
2024-10	Ress	28	11	1	33	80	39
2024-08	Ress	26	9	1	31	73	39
2024-07	Hyp	29	16	1	31	86	39
2024-05	Ress	29	6	1	31	94	39
2024-03	Ress	28	17	1	39	68	39
2024-02	Exp	28	12	1	39	77	39
2024-01	Hyp	24	10	1	39	53	39
2023-12	Rec	30	8	1	36	90	39
2023-11	Hyp	30	5	1	36	94	39
2023-10	Exp	28	4	1	36	88	39
2023-08	Rec	29	5	1	33	93	39
2023-06	Rec	31	13	1	37	92	39
2023-04	Hyp	30	8	1	37	95	39
2023-02	Hyp	32	11	1	42	95	39
2023-01	Ress	31	8	1	42	92	39
2022-11	Ress	33	21	1	48	86	39
2022-09	Rec	29	4	1	41	85	39
2022-08	Ress	31	6	1	42	95	39
2022-06	Hyp	32	38	1	48	66	39
2022-05	Exp	32	33	1	48	65	39
2022-03	Exp	33	50	1	52	51	39
2022-01	Rec	28	53	1	52	18	39
2021-11	Rec	28	51	1	53	40	23
2021-09	Exp	22	42	1	52	11	23
2021-07	Exp	21	36	1	52	9	23
2021-04	Rec	22	30	1	54	22	23
2021-02	Rec	31	13	1	53	95	23
2021-01	Exp	31	9	1	53	97	23
2020-11	Exp	29	2	1	52	94	22
2020-10	Rec	29	3	1	52	95	22
2020-08	Rec	30	1	1	53	97	22
2020-05	Rec	28	1	1	55	89	22
2020-04	Exp	29	0	1	55	91	22
2020-02	Exp	21	1	1	60	38	22
2020-01	Rec	19	3	1	60	25	22
2019-11	Rec	21	3	1	61	29	28
2019-08	Rec	19	1	1	62	20	28
2019-07	Hyp	26	1	1	62	60	28
2019-05	Hyp	30	12	1	64	70	28
2019-02	Hyp	31	9	1	65	81	28
2019-01	Hyp	33	9	1	65	92	28

Data Vintages

Price (HPI)2025-Q3

Permits2025-12

Income2024

Employment2025-12

Migration2022