The Scotts Valley real estate market, found in the midst of Santa Cruz County, continues to face a number of challenges despite a distinct bright spot in the apartment investment market. According to an August 16, 2010 report from the Santa Cruz Sentinel, “In the Silicon Valley, there were no apartment building sales recorded during the first two quarters of 2010, but sales have been reported in the current quarter, according to RealFacts, an apartment data research company. According to RealFacts, there hasn't been an apartment property sold since 2007. The company, however, doesn't track data relating to complexes of fewer than 50 units and there are only about a dozen properties in Santa Cruz County with more than 50 units. In Santa Cruz County, where building is limited, there should be a "swelling of demand for rental properties," Fletcher said. The Tropicana property, which houses eight one-bedroom units and 29 two-bedroom units, was 100 percent occupied. Rents ranged from $1,000-$1,195, according to Kay. The Mid-County location near the beach was a definite draw, but, the building, built in 1957, wasn't exactly a marketing dream. While "the bones of the building" were solid, it needed paint and some updating…Local developer Bill Brooks, however, hasn't seen much change in the apartment market because rents haven't dropped significantly. The biggest impact for him has been that the housing market has slowed and several condominium and housing developments have turned into rental units by default.”
This decline in Scotts Valley homes for sale is causing a fiscal pinch for many county services in the region, many of which are already under stress. A July 29, 2010 report also from the Santa Cruz Sentinel found that “Property taxes, a key source of income for cities and schools and a bellweather of the local economy, are on the decline in Santa Cruz County for a second straight year. The county Assessor's Office, meeting an Aug. 1 deadline, closed the books this week on the value of homes, offices and shopping centers countywide, recording a 0.6 percent drop in total property value over the year before. While the new figure means hundreds of property owners will owe less tax when October bills arrive, the lower roll also means struggling city and county governments, schools and dozens of special districts providing fire, water and sewer services will see another year of diminished revenue.”