By Judd Bull, CPI — Landmark Property Inspections

Updated February 2026

After thousands of home inspections across Santa Cruz County — from the Victorian cottages of Capitola to the hillside homes of Scotts Valley — we’ve seen just about everything hiding behind walls, under floors, and up in attics.

Santa Cruz County homes are unique. Most were built before 1990, many before 1970. They’ve weathered decades of earthquakes, coastal moisture, and California sun. They’re beautiful, full of character — and full of surprises.

Here are the 10 most common issues we find during inspections, ranked by how often we see them. If you’re buying a home in Santa Cruz County, this is what you need to know.

1. Foundation Cracks & Seismic Damage — Found in 6 out of 10 Homes

Santa Cruz sits in one of California’s most seismically active zones. The 1989 Loma Prieta earthquake hit just miles from here, and the ground hasn’t stopped moving since.

What we find:
• Hairline cracks in concrete foundations (often cosmetic, sometimes structural)
• Shifted or displaced foundation walls
• “Soft story” construction — living space built over a garage with inadequate bracing
• Hillside homes with compromised retaining walls
• Cripple wall failures in older homes that haven’t been retrofitted

Why it matters: A cracked foundation isn’t always a dealbreaker, but an unbraced cripple wall in earthquake country is a serious safety risk. We use specialized tools to determine whether cracks are cosmetic or structural — and whether the home has been seismically retrofitted.

Our advice: If the home was built before 1980 and hasn’t been retrofitted, budget for a seismic upgrade. It could save the entire structure in the next big one.

2. Moisture Intrusion, Wood Fungus & Rot — Found in 6 out of 10 Homes

Living near the ocean is beautiful. It’s also brutal on homes.

Santa Cruz County’s marine layer pushes moisture into homes almost year-round. Most homes here don’t have air conditioning — there was never a need for it — which means there’s no mechanical dehumidification happening. That combination creates the perfect environment for wood fungus and rot.

What we find:
• Active wood rot under decks, balconies, and shaded exterior walls
• Fungal growth in crawl spaces with inadequate ventilation
• Interior moisture damage around windows and bathroom areas
• Subfloor damage from years of accumulated moisture
• Deteriorated siding and trim, especially on north-facing walls

Why it matters: Wood rot is progressive. What starts as a soft spot on a deck post can spread into structural framing if left unchecked. We’ve seen decks that looked fine from above but were completely compromised underneath.

Our advice: Pay special attention to any area that stays shaded and damp. Under decks, behind dense landscaping, and north-facing walls are the usual suspects. A thermal imaging scan (included in every Landmark inspection) can detect moisture that’s invisible to the naked eye.

3. Wood Destroying Insects — Found in 6 out of 10 Homes

Termites love Santa Cruz County as much as the people do.

The combination of older wood-framed homes, coastal moisture, and moderate temperatures creates ideal conditions for both drywood termites and wood-boring beetles.

What we find:
• Drywood termite frass (droppings) in attics and along baseboards
• Subterranean termite mud tubes along foundation walls
• Beetle exit holes in exposed framing and hardwood
• Active infestations in crawl spaces and garage framing
• Previous treatments that have worn off or were incomplete
Why it matters: Termite damage is often hidden inside walls and under floors. By the time you see visible signs, the colony has been feeding for years. Left untreated, termites can compromise structural framing.

Our advice: A standard home inspection identifies signs of wood destroying insects, but a separate WDO (Wood Destroying Organism) report — often called a “termite inspection” — provides a more detailed assessment. In Santa Cruz County, we recommend getting both.

4. Outdated & Dangerous Electrical Systems — Found in 4 out of 10 Homes

Santa Cruz County’s older housing stock means a lot of electrical systems that haven’t kept up with modern demands — or modern safety standards.

What we find:
• Cloth loom wiring — insulation that deteriorates and crumbles over time, exposing bare conductors
• Knob and tube wiring — pre-1950s wiring that can’t handle modern electrical loads
• Dangerous electrical panels from discontinued manufacturers:
– Federal Pacific Stab-Lok — known to fail to trip during overloads
– Zinsco — breakers can melt to the bus bar
– Sylvania — similar failure patterns to Zinsco
– Challenger — prone to breaker failure
– Magnetrip — outdated and unreliable
• Double-tapped breakers (two wires on one breaker)
• Ungrounded outlets throughout the home
• DIY wiring that doesn’t meet code

Why it matters: These aren’t just code violations — they’re fire hazards. Federal Pacific and Zinsco panels have been linked to thousands of house fires nationwide. Insurance companies are increasingly refusing to cover homes with these panels, which can kill a deal at closing.

Our advice: If a home has any of the panel brands listed above, plan on replacing it. Budget $2,000–$4,000 for a panel upgrade. It’s not optional — it’s safety.

5. HVAC Issues — Found in 4 out of 10 Homes

Here’s something that surprises buyers relocating to Santa Cruz: most homes here don’t have air conditioning. The marine layer keeps summers mild enough that historically, AC was unnecessary.

But every home has a furnace. And many of those furnaces are old.

What we find:
• Furnaces past their expected lifespan (20+ years old)
• Cracked heat exchangers — a carbon monoxide risk
• Inadequate or disconnected ductwork
• Missing or outdated carbon monoxide detectors
• No cooling system at all (increasingly an issue as summers get warmer)

Why it matters: A cracked heat exchanger can leak carbon monoxide into the living space. It’s one of the most dangerous findings in a home inspection, and it’s invisible without proper testing.

Our advice: If the furnace is over 20 years old, have it professionally evaluated even if it’s still running. “Still working” and “still safe” aren’t the same thing.

6. Roof Problems — Found in 3 out of 10 Homes

Santa Cruz County is easier on roofs than many parts of California — no extreme heat, no heavy snow loads. But coastal weather brings its own challenges.

What we find:
• Composition shingles past their rated lifespan
• Missing or deteriorated flashing around chimneys and roof penetrations
• Moss and algae growth from constant coastal moisture
• Improperly installed or missing kick-out flashing (a leading cause of wall leaks)
• Flat roof sections with ponding water
• Evidence of layered roofing (new shingles over old — adds weight, hides problems)

Why it matters: A roof replacement in Santa Cruz County typically costs $10,000–$25,000 depending on size and material. Knowing the roof’s remaining lifespan is one of the most valuable things a home inspection can tell you.

Our advice: If the seller says the roof is “5 years old,” verify it. We inspect the roof surface, flashing, gutters, and attic space to determine the roof’s actual condition — not just its age on paper.

7. Plumbing Problems — Found in 3 out of 10 Homes

Older homes often mean older plumbing. And in Santa Cruz County, “older” can mean original pipes from the 1940s or 1950s.

What we find:
• Galvanized steel pipes — corrode from the inside out, restricting water flow and eventually leaking
• Polybutylene pipes (1978–1995) — known to fail prematurely; class action lawsuits were filed over these
• Deteriorated supply lines under sinks and at water heaters
• Slow drains indicating root intrusion in sewer laterals
• Water heaters past their lifespan or improperly strapped (earthquake requirement in California)
• Active leaks in crawl spaces that homeowners don’t know about

Why it matters: A full re-pipe of a home can cost $5,000–$15,000. Catching galvanized or polybutylene pipes during inspection lets you negotiate before closing rather than discovering it after.

Our advice: If the home was built between 1940 and 1970, ask about the supply pipe material. If it’s galvanized, budget for replacement — it’s a matter of when, not if.

8. Insulation Deficiencies — Found in 2 out of 10 Homes

Many Santa Cruz County homes were built when insulation standards were minimal — or nonexistent.

What we find:
• Missing attic insulation or insulation well below current standards
• No insulation in exterior walls (common in pre-1970 construction)
• Crawl space insulation that has fallen or been damaged by moisture
• Missing vapor barriers in crawl spaces
• Disconnected or poorly sealed ductwork running through unconditioned spaces

Why it matters: Inadequate insulation drives up energy costs and makes homes uncomfortable. In Santa Cruz’s older homes, adding insulation is one of the most cost-effective upgrades a homeowner can make.

Our advice: Check the attic. If you can see the ceiling joists (the insulation isn’t covering them), you likely need more. Current standards call for R-38 in attics — most older Santa Cruz homes have R-13 or less.

9. Drainage & Grading Issues — Found in 1 out of 10 Homes

Santa Cruz County’s terrain is anything but flat. Hillside lots, mature trees, and decades of landscaping changes can all redirect water toward — rather than away from — a home’s foundation.

What we find:
• Negative grading that directs surface water toward the foundation
• Clogged or missing rain gutters and downspouts
• Retaining walls with inadequate drainage (weep holes blocked or missing)
• Standing water in crawl spaces after rain
• Hillside erosion threatening foundations or decks

Why it matters: Water is a home’s worst enemy. Persistent moisture against a foundation can cause cracking, settlement, and mold growth in crawl spaces. Fixing grading and drainage is usually inexpensive compared to the damage it prevents.

Our advice: Walk the perimeter of the home after a rain. If you see water pooling against the foundation or flowing toward the house, that’s a problem worth addressing before it becomes expensive.

10. Unpermitted Work — Found in 1 out of 10 Homes

Santa Cruz County’s bohemian spirit extends to home improvement. Not every renovation goes through the permit office.

What we find:
• Converted garages being used as living space without permits
• Added bathrooms or bedrooms with substandard electrical and plumbing
• Enclosed patios or porches counted as square footage
• Hot tub and spa electrical work done without inspection
• Deck additions built without proper footings or fasteners

Why it matters: Unpermitted work can create safety hazards, complicate insurance claims, and cause problems at resale. Lenders may require permits to be retroactively pulled, which can delay or kill a transaction.

Our advice: If something in the home looks “added on” or doesn’t match the original construction quality, ask to see the permits. Your real estate agent can pull the permit history from the county.

The Bottom Line

Every home has issues. The question isn’t whether you’ll find problems — it’s whether you find them before or after you buy.
Santa Cruz County homes are special. They sit in earthquake country, face constant coastal moisture, and most were built decades ago with materials and methods that don’t meet today’s standards. That’s not a reason to avoid buying here — it’s a reason to get a thorough inspection from someone who knows exactly what to look for in these homes.

At Landmark Property Inspections, we’ve inspected thousands of homes across Santa Cruz, Capitola, Aptos, Soquel, Scotts Valley, Watsonville, and beyond. Every inspection includes thermal imaging and a detailed digital report so you know exactly what you’re getting into.

Ready to schedule an inspection? Call us at (831) 649-6000 or visit landmarkpropertyinspections.com/contact.

Landmark Property Inspections serves Santa Cruz County, Monterey County, and the Central Valley. All inspectors are InterNACHI Certified Professional Inspectors (CPI) with infrared thermography certification.