SANTA CRUZ, Calif. - It’s no secret that it's expensive to live in Santa Cruz, but a new study out of New Zealand said it's among the least affordable places in the world.
The international housing affordability study surveyed 92 major metropolitan areas and ranked them by the house price to income ratio.
The calculation is used by the World Bank, the United Nations, among others.
To find out how affordable a place is, take the median home price and divide by the median household income. If that number is greater than five, then the area is severely unaffordable. Santa Cruz got 11.6.
"The median price in November for single family homes in the county was $875,000. That's an increase from $867,000," Santa Cruz Realtor Liz Kroft said.
That was an $8,000 price hike in just a month in a real estate market that seems to be hotter than ever.
"There were more sales last month than there were in October. That's sort of a surprise given inventory is on the decline and the price just keeps appreciating," Kroft said.
Researchers said the area's housing affordability has dipped to a level not before recorded in the U.S.
Mike Mulhern is helping to sell one just outside of the city. He said over the years, a lot of locals have been pushed out.
"A lot of our buyers, most of our buyers, I believe, come from over the hill in Silicon Valley. It's either their primary residence, and they are not afraid to drive Highway 17, or telecommute a couple of days, or it's a second home," Mulhern said.
The city of Santa Cruz has got a long to-do list to help with what officials call a housing crisis.
"Some of those are working with some of our local school districts and how we can help encourage development on public lands; looking at our own city lands to see are there opportunities where we can encourage development of housing,” said Mayor David Terranzas. “(We are) also looking at our fee structures on how we can create a better responsiveness to developers to say, 'hey, (here's) what our reasonable fees (are) in light of the current demands for housing'."
Some Realtors said housing price increases might slow down a little bit next year because of tax reform and a possible increase in interest rates.