Martínez, born in 2007, barely featured for Racing last season, making just 10 appearances in the second tier, but he burst into the spotlight last weekend with a stunning first-time strike in his top-flight bow.
The midfielder rifled a shot into the top corner during Racing's 2-2 draw with Villarreal, a moment that sent him into an emotional celebration and immediately caught the eye of scouts across Spain.
The Athletic first reported Real Madrid's interest, describing the 19-year-old as a potential long-term target for the European champions. A €3m release clause initially looked like it might complicate any deal — not for financial reasons, but simply due to a lack of urgency on Madrid's part — though talks are understood to have accelerated sharply in the past few hours, with a move now looking increasingly likely.
The plan, in principle, is for Martínez to be registered with Madrid's reserve side, though involvement with the first-team squad has not been ruled out. Racing, for their part, are pushing to keep the midfielder on loan for a season.
A positional midfielder who rarely strays out of position, Martínez is more a defensive-minded presence than an attacking one, though his debut goal showed exactly what he is capable of when the opportunity arises. He combines composed passing with a strong work rate.
In that first LaLiga appearance, he played 69 minutes, covered 8km, scored with his only shot on target, won four of eight duels, committed three fouls, made one successful tackle and recorded one recovery.
Real Madrid are not the only club to have shown interest. Barcelona and Villarreal both made approaches for Martínez as far back as last winter, but the player opted to stay in Santander even if it meant splitting his time between the first team and Racing's reserve side.
His breakthrough arrives in the same summer that fellow Cantabrian Sergio Canales, who left Racing Santander for Real Madrid as a teenager in 2010, returned to the club at 35, adding an extra layer of symbolism to a story already being framed as one of Spanish football's feel-good tales of the new season.