Location: Santa Cruz-Watsonville, CA | Metro: Santa Cruz-Watsonville, CA MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $2,970 |
| 1 Bedroom | $3,090 |
| 2 Bedrooms | $3,940 |
| 3 Bedrooms | $5,030 |
| 4 Bedrooms | $5,290 |
| 5 Bedrooms | $6,136 |
| 6 Bedrooms | $6,872 |
| 7 Bedrooms | $7,422 |
| 8 Bedrooms | $7,793 |
U.S. Census Bureau data (2024)
The analysis of ZIP code 95007 reveals a unique balance between yield and stability, making it an interesting market for real estate investors. The Fair Market Rent (FMR) for 2024 is set at $4,130, which is notably higher than the current market rent of $2,034. This suggests a high-yield potential for rental properties in this area, as landlords can expect to charge significantly above the average market rate.
However, the stability of the market is also a critical factor. With 80.1% of residents being renters, there is a strong demand for rental housing, which supports steady cash flow. The median household income in this ZIP code is $91,352, indicating that tenants have a relatively robust financial standing to support higher rents. The lack of data on days on market (DOM) makes it challenging to assess the speed at which properties are typically rented, but the high percentage of renters and the strong income levels suggest that vacancy rates should remain low.
The median home value in ZIP 95007 is $753,321, which is considerably high and points towards a more affluent neighborhood. This could mean that while the potential for high yields exists, the overall cost of acquiring property might be prohibitive for smaller investors looking to turn a quick profit through flipping. The market appears to be more suited for long-term rental investments rather than short-term flips due to the high home values and strong tenant demand.
To summarize, ZIP 95007 leans towards being a high-yield market with a strong potential for steady cash flow. The key figures driving this conclusion are the FMR of $4,130, which is double the current market rent, and the high percentage of renters at 80.1%. Additionally, the median income of $91,352 supports the ability of tenants to pay higher rents. However, the high median home value of $753,321 implies that this is not a typical flip-style market, but rather a zone where long-term rental strategies would be more effective.
Data Sources: FMR data from HUD (2027). 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.