The average price of a Santa Cruz home for sale strongly recovered in the month of May, rebounding from much lower levels to well over a half-million dollars. According to a June 19, 2010 article from the Santa Cruz Sentinel, “The housing market sprang to life in May, with 160 single-family homes changing hands, the most in that month since 2006. Still, it's nothing like the boom years when sales in May topped 200. The median price, the midpoint for what sold, was $535,000, down from $553,000 in April. Last year it was $425,000; two years ago, it was $610,000. American Dream Realty, who tracks the data, noted 46 percent of sales were under $500,000 and 4 percent were over $1 million. About 40 percent of sales involved bank-owned homes and short sales where the lender accepts less than what is owed.”

The article by Jondi Gumz went on to note that the affordability of Santa Cruz homes for sale is improving, stating that “Bailey cited two factors in the uptick: Tax credits and affordability. During the boom, the Santa Cruz affordability index was 18 percent, so few had the opportunity to buy. Now the index is 44 percent. Loans insured by the Federal Housing Administration, which allow a smaller down payment, make up half the market, Bailey estimated, a dramatic change from three years ago when these loans were not available in Santa Cruz County. Bailey said the interest rate on a fixed-rate mortgage is "in the 4s," which is what borrowers got in an adjustable-rate loan three years ago. In other words, if borrowers can afford to buy, they need not worry about escalating payments.”

This strength relative to the rest of the region may be a result of a shallower recession than surrounding communities. According to a June 17, 2010 article also in the Santa Cruz Sentinel, “Taxable sales in Santa Cruz County dropped 17 percent in the second quarter of 2009 compared to the year before; the statewide decline was 19 percent…Santa Cruz fared better than other cities in the county, with a drop of 11.9 percent in taxable sales compared to 16.4 percent in Watsonville, 19.5 percent in Capitola real estate sales and 30 percent in Scotts Valley real estate.”