The Santa Cruz, CA metro area housing market in January 2025 presents a complex landscape characterized by declining prices but increased sales activity. The Median Sales Price has dropped to $1,002,500, marking a significant year-over-year decrease of 16.5%. This decline in sales price contrasts with the Median List Price, which stands at $1,037,250, down by 5.6% from the previous year. Despite the drop in prices, the market shows resilience in other areas.

One of the more positive indicators is the increase in Homes Sold, which rose by 12.5% year-over-year to 90 units. Pending Sales also saw an uptick, increasing by 8.1% to 107 units. This suggests a strong buyer interest despite the declining prices. Additionally, New Listings surged by 45.5%, reaching 160, which could indicate that sellers are eager to capitalize on the current market conditions.

The Inventory of Homes Available for sale has increased by 23.7% to 350 units, contributing to a rise in the Months of Supply, now at 3.9 months, a 40% increase from last year. This expanded inventory provides buyers with more options, potentially contributing to the downward pressure on prices.

In terms of pricing dynamics, the median Price Per Square Foot has increased by 6.4% to $721.85, while the Median List Price per square foot has risen by 4.1% to $751.54. These figures suggest that while overall prices are down, the value per square foot is appreciating, indicating a demand for quality over quantity in the housing market.

The average sale to list ratio has improved slightly, now at 98.8%, reflecting a 0.8% increase year-over-year. However, the percentage of Homes Sold above list price has decreased by 2.8% to 22.2%, indicating that fewer buyers are willing to pay premiums in the current market. Price Drops have become more common, with 16% of listings experiencing reductions, a 2.9% increase from last year.

Homes are spending more time on the market, with the Median Days on Market rising by 8% to 74 days. Despite this, a notable 37.4% of homes are going off the market within two weeks, up by 3% year-over-year, suggesting that well-priced homes are still moving quickly.

Overall, the Santa Cruz housing market in January 2025 is marked by a decline in prices but an increase in sales activity and inventory. Buyers are benefiting from more choices and lower prices, while sellers face the challenge of adjusting to a market with increased competition and longer selling times. The market's future will likely depend on how these dynamics evolve in the coming months.