Today just before my drive up the Cabrillo Highway, instead of going into Santa Cruz, I decided to get off Hwy 17 at Scotts Valley, and go Mount Hermon road into Felton. I spent some time roaming around Felton, and seeing if any houses were for sale. There really wasn't much near the main roads. I did find in Forest Lakes a 3 bedroom 1500 sq ft. "bank owned cottage" for $294,000. I didn't find anything in a couple of mobile home parks that was for sale.
Other than that, I couldn't see much sign of real estate distress in Felton. The housing bubble seems to have mostly missed San Lorenzo Valley.
While driving out of Felton, I was doing some mental calculations on that "bank owned cottage" and realized the real estate numbers aren't that great for Felton.
When I first moved to California about 19 years ago, the cheapest property to have in Santa Cruz county would have been a fixer upper for $100,000. It would have been not much more than a condo really.
More than likely, the house I looked at would have been $150,000 back then. In 18 years it has only doubled in value? That's not a very good investment. At 10% return, (which seems like a number I saw some national realtors website touting as a typical return in real estate), the investment would double every 7 years (rule of sevens).
So in 7 years, it would have been at least 250K, and another 7 years later, at least 500K. And four or five years after that, it should have been well on it's way to 750K or more.
So perhaps the housing bubble is adjusting even San Lorenzo Valley.