Location: Santa Cruz-Watsonville, CA | Metro: Santa Cruz-Watsonville, CA MSA
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $3,020 |
| 1 Bedroom | $3,170 |
| 2 Bedrooms | $3,980 |
| 3 Bedrooms | $5,180 |
| 4 Bedrooms | $5,380 |
| 5 Bedrooms | $6,241 |
| 6 Bedrooms | $6,990 |
| 7 Bedrooms | $7,549 |
| 8 Bedrooms | $7,926 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $3,170 | $470,577 | 0.67% | D |
| 2BR | $3,980 | $622,399 | 0.64% | D |
| 3BR | $5,180 | $857,124 | 0.6% | D |
| 4BR | $5,380 | $1,012,815 | 0.53% | F |
U.S. Census Bureau data (2024)
The classification of ZIP 95006, Boulder Creek, CA, on the axes of yield and stability reveals a nuanced market condition. On the yield axis, the Fair Market Rent (FMR) for the fiscal year 2024 is set at $4,030. This figure significantly exceeds the market rent of $2,129, indicating a potential for higher rental yields when properties are rented at or near the FMR. However, the median home value of $727,826 suggests that the initial investment required to enter this market is substantial.
Regarding stability, the percentage of renters in the area stands at 23.5%, which is relatively low compared to typical rental markets. The lack of data on days on market (DOM) makes it difficult to assess how quickly properties can be leased or re-leased. Nevertheless, the median household income of $102,167 points towards a stable economic environment, where tenants are likely to have the financial capacity to meet their rental obligations.
Given these figures, ZIP 95006 leans towards being a steady-cashflow zone rather than a high-yield/low-stability market. The significant gap between the FMR and the market rent implies that landlords can potentially achieve higher returns by renting at or close to the FMR. However, the low percentage of renters and the high median home value suggest that the market is less volatile and more suited for long-term investments with reliable cash flow. Landlords and small-portfolio investors should consider the balance between the potential for higher yields and the stability offered by the local economy when making investment decisions in this ZIP code.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). Demographics from U.S. Census (2024).
About FMR: Fair Market Rent (FMR) is used to determine payment standards for the Section 8 Housing Choice Voucher program, initial renewal rents for some expiring project-based Section 8 contracts, and rent ceilings for HOME Investment Partnerships.