Many first-time homebuyers have made the decision to finally stop renting, and to buy a home. In Santa Cruz County, in today’s market, this is not an easy decision to make. So why, even with today’s home prices the way they are, are renters planning to make the move to become homeowners?

Accumulate Wealth

The internet is brimming with financial arguments for and against homeownership. At the end of the day, the pro-rental argument has to contend with one difficult fact: the median national homeowner net worth is $174,500, and that is 36 times greater than the median renter’s net worth of $5,100 (Federal Reserve, Survey of Consumer Finances). The forced savings of building equity in real property with a monthly mortgage payment, and the compelled savings of needing to qualify for a mortgage in the first place, combine to fulfill the adage that homeownership is the surest way to wealth in the USA. Renters may argue that it shouldn’t be this way, but these arguments fall short against reality.


Even after we accept conventional wisdom that homeownership is financially more desirable than renting, Santa Cruz has other factors to consider. For many renters with whom I’ve spoken, the biggest concern on everyone’s mind is security.

Security in a Competitive Rental Market

The price of rental units in Santa Cruz is rising significantly, and tenants are rightly concerned about where this leaves them. Sixty days’ notice is all that separates even long-term tenants on a month-to-month lease from notice to terminate tenancy, when, for example, the owner decides to sell. Once displaced, tenants are seeing first-hand that the rental market is not what it was three or five years ago. Many other tenants face stiff rising rents, as landlords seek to capitalize on the trends, and for a growing number of them, the choices are discouraging: downsize, pay more per month, or find a new town to call home.

The opportunity cost of unit vacancy, which once discouraged landlords from raising rents significantly, is now less of a concern, as fierce competition for available rentals manifests in tenant-applicants willing to sign a lease at a moment’s notice and prorate the remainder of the current month. With shorter terms of vacancy and thus fewer reasons to hold off on raising rents, landlords are responding to market forces and increasing rents county-wide.

In this climate of upheaval, the prospect of a locked-in fixed payment for the next 30 years is very appealing. As they see rents race skyward over the hill in San Mateo and Santa Clara Counties, many wonder how closely Santa Cruz County will lag behind.

First-time buyers who take the leap from renter to homeowner find themselves on the other side of the glass. The same exact market forces that before contributed to anxiety and uncertainty in their lives are instead yielding financial returns and contributing to secure peace of mind.

Community and Social Benefits

Homeownership benefits society, we know. There is a positive relationship between homeownership in a community and residential satisfaction in that community. Civic engagement improves as residents become more involved in elections and tackling local issues themselves. Homeownership has a positive correlation with both psychological and physical health. Properties don’t sink into disrepair. Children perform better in schools, and neighborhoods develop cohesion and identity. Communities turn inward to grow and assume a level of autonomy for their own progress.

It doesn’t take very long for first-time visitors to Santa Cruz to establish that there is something very special going on here in this city. In no other town is it normal to walk around in a t-shirt emblazoned with the name of the very town you’re in, and yet, one-in-four people on Pacific Avenue are donning a Santa Cruz Skateboards shirt or sweatshirt, at this very moment. There is a tremendous amount of local pride in this town!

Santa Cruz pride extends to every facet of the community identity, from its neighborhoods and surf spots, to its culture, environment, community events, history, recreation, and natural beauty. Everyone wants to nurture some beloved aspect of this city and county.

By finding the means to enter this housing market, first-time homebuyers become a part of this fabric. The positive effects of homeownership on society are something everyone should care about. The desire to be a contributing part of this amazing community is something many of us have experienced. Buying a home to live in is a great way to do both.