Todd & Lisa Sheppard
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Lisa
Sheppard
Mobile:
707-483-9990
Email:
Lisa@TEAMSHEP.com
BRE # 01154225
Todd
Sheppard

Mobile:
707-235-6870
Email:
Todd@TEAMSHEP.com
BRE # 01314350

Blog

Sales of Million-Dollar Homes Surge in Sonoma County

July 14th, 2017   by lisasheppard

Sales of million dollar homes in Sonoma County saw a jump last month, with listings and sales increasing while sales have decreased slightly in the rest of the market.  The surge in sales of million dollar homes has been fueled by Bay Area buyers that made money in Silicon Valley, but are looking for paradise in the country.

Facebook, Google, Apple and other tech companies have created thousands of new millionaires.  Because the Bay Area’s median price condo sells for $1.2 million, these buyers are now looking outside of the big urban areas to reside.  While Sonoma County has experienced increasing demand and higher median prices, it is still considered one of the most affordable places to live in the Bay Area.

The top areas for million dollar home sales are Santa Rosa, Sonoma Valley, Healdsburg, Sebastopol and Petaluma.  Sonoma County was recently named among U.S. metro areas where the number of million dollar home listings has skyrocketed.

Sonoma County has seen a significant boost in home sales after the national housing crisis that began in 2007.  However, while home prices have increased, home sales have declined in the last 3-4 years due to lack of available homes.

While homes have become unaffordable for most living in the county, those that reside outside of the county find the homes attractively priced.  These buyers are often looking for second or third homes away from the hustle and bustle of the city, with a country feel and a warm, sunny climate.  Those of us that live in Sonoma County already know it is the best place on Earth.  Now others are discovering that as well!

Sonoma County Home Sales Median Price Hits New Record High

May 9th, 2017   by lisasheppard

Last summer, Sonoma County housing market reached a median sales price high of $600,000.  However, the all-time high record was just broken this March when the median sales price hit $639,000 due to strong demand and tight inventory.  This new median price is double the median price 5 years ago, and represents a 14% increase from a year earlier.

This was the first time in 12 years that the County set a new record, and exceeded the previous record of $619,000 set in August 2005.

While this may have sellers celebrating, it puts buyers in sellers market which translates to multiple offers over asking price due to the low number of available and affordable homes.

In addition, there has been a significant increase in the number of luxury home sales.  Homes selling for over $1 million or more increased 41% compared to the same time last year. The number of homes selling for less than $600,000 decreased by 24%.

Tight inventory and increasing home values have many buyers wondering when/if prices will level out.

First-Time Buyer Boosted by Wage Growth & Thriving Economy

April 11th, 2017   by lisasheppard

According to the National Association of Realtors 2017 Home Buyer and Seller Generational Trends Report, first time buyers now account for 35% of home buying activity for 2016, up 32% from 2015.  Millenials made up the bulk of first-time buyers at 66%, and have consistently represented the largest share of first-time buyers for the last 4 years.

This increase in first-time buyer activity comes as a result of higher incomes and a thriving economy.  The biggest challenge for millennials continues to be student loan debt and rising home prices.

Even with the increase in first-time buyer activity, college-educated young adults are still having difficulty purchasing homes due to rising rents and lower salaries, which is driving them to take on housemates or move back in with their parents.  This trend is one of the reasons for the dip in home ownership, which is at its lowest rate in almost 50 years.

Sonoma County Ranked 19th Among “Hot” Housting Markets

March 8th, 2017   by lisasheppard

Realtor.com ranked Sonoma County 19th among housing markets where affordable homes get snapped up quickly.

In February, the average days on the market remained at 67 days, compared to the now top-ranked Vallejo-Fairfield area with 33 days.  A year ago, Sonoma County ranked 8th with a median 48 days on the market.

Sonoma County has consistently ranked high and help the top ranking in 2015.  While homes sales have fallen a bit over the last few years, the ranking is more than likely due to the persistent low inventory issue that has been plaguing the County for the last year.

Thus far, 2017 is shaping up to be a seller’s market and recent survey shows that buyers are more willing to get off the fence and purchase this year, making for ideal conditions.

It comes as no surprise that California dominates the list, with 12 of the top 20 markets.  Rounding out the list is San Francisco/Oakland (2nd); San Jose/Sunnyvale (5th); San Diego (6th); Sacramento/Roseville (7th); Stockton/Lodi (8th); Yuba City (10th); Modesto (11th); Oxnard/Ventura (14th); Fresno (15th) & Los Angeles/Long Beach (20th).

Year in Review: Sonoma County Homebuyers, Renters Strained as Housing Costs Soar

January 2nd, 2017   by lisasheppard

An interesting look at the challenges faced by potential homeowners during the last several years in Sonoma County, as well as a look at the future of the housing market.  Sonoma County has been plagued with high demand and low inventory.  At the same time, many home owners have been priced out of the market due to ever-increasing home values.  It is anticipated that the County will get some relief in the form of lower rents and additional new home construction this year.

To read more, Click Here.

Sonoma County Home Sales Down 10%

November 18th, 2016   by lisasheppard

Single-family homes have decreased by 10% in October from the same period last year in Sonoma County’s with the continuing inventory shortage, especially among houses priced $500,000 or less.

A total of 389 single-family homes sold in October, which also represents a 10% decrease from September. With this inventory shortage of homes in the affordable price range, there is a strong chance that the number of homes sold in 2016 will be less than what sold in 2015.  New listings during summer months, which tends to be peak inventory time, declined to levels not seen since the recession in 2009.

A new housing project near Sonoma State University, which will add 175 new single-family homes, will not make that much of a difference. Many buyers are finding that they have to “settle” for a home just because it fits in their price range and there are not many homes to choose from in the $500,000 or less range.  Inventory has been an ongoing issue for Sonoma County and is not expected to change in the near future.  Potential sellers are less inclined to sell their homes because they’re unsure they’ll be able to find a suitable replacement home.  First-time buyers are the ones feeling the effects of the tight inventory conditions.

Condominiums, which used to be a viable option, are not faring much better.  Condo sales are only up 4% through 2016.  Home prices have rebounded from the recession in 2009, when the median price sank to $305,000.  The current median price in Sonoma County is $595,000.  With tight inventory conditions expected to continue, it is likely that the median price will continue to go up each year.  However, buyers are pushing back and are unwilling to pay inflated prices in the marketplace.  Several months ago, a seller would easily get immediate offers, most over asking price.  In today’s market, there is an uptick in buyer activity, but sales are not as strong and homes are not getting multiple, above-asking price offers.

Distressed property sales have declined 20.1% in Sonoma County, with non-distressed property sales up 2%.

As has been the case for some time now, the problem is due to a lack of inventory, as buyer demand remains high.  When prospective buyers do not have many properties to choose from, interest is lost as the buyer is unable to find anything, thus perpetuating the cycle until more inventory becomes available.

2.5 Million Consumers Hit by Financial Crisis Ready to Reenter Housing

November 1st, 2016   by lisasheppard

fall house neighborhood

During the financial crisis of 2006 that lasted several years, millions of home owners were affected by a short sale or foreclosure.  Several home owners have been able to re-enter the housing marketing after rebuilding credit.  A short sale or foreclosure stays on consumer’s credit record for a total of 7 years. However, we are now entering a period where those who took a really significant hit to their credit will be able to once again enter the housing market as the short sale or foreclosure comes off their credit report.  There are a total of 2.5 million consumers, called “boomerang” buyers.

In the coming years, boomerang borrowers will be a critical segment of the real-estate market.  This is a promising trend for the housing market and spells good news for both demand and for potential home owners who are thinking of selling their home in the near future.

Consumers More Optimistic About Economy in September

September 27th, 2016   by lisasheppard

low rates

The Index of consumer sentiment remained unchanged in September at 89.8%.  There was no change from the previous month, but it does represent a 3% increase from last year.  The index of consumer expectations increased to 81.1%, up 3% from last month and up 3.7% from last year.

Modest gains in the outlook for the national economy have been offset by small declines in income prospects as well as buying plans.

An article by Jill Mislinski for Advisor Perspectives explains what this means historically:

The Michigan average since its inception is 85.4. During non-recessionary years the average is 87.6. The average during the five recessions is 69.3.

“While income gains expected during the year ahead have edged upward, declines in inflation expectations were the main reasons future financial prospects improved, as both near and long term inflation expectations fell to near record lows,” Curtin said. “Nonetheless, buying plans suffered from the perception that no additional price discounts would be offered.”

“Even the more optimistic outlook for the economy had little if any impact on the expected growth rate in new jobs,” he said. “Importantly, all of these changes were relatively minor. Overall, consumers remain reasonably optimistic about their economic prospects. Real personal consumption expenditures can be expected to grow by 2.6% through mid 2017.”

Sonoma County Housing Market has Slowest Summer in Five Years

September 14th, 2016   by lisasheppard

The summer housing market tends to be a bustling and robust market, with sales reaching their peak for the year.  This summer, Sonoma County market experienced one it’s slowest seasons in the last five years, with only 1,384 single-family homes sold during the 3-month period, compared to 1,526 homes sold a year earlier.

The county’s home prices have certainly rebounded since 2012, with the median price rising to $590,000 in August, coming quite close to the record high median price of $619,000 in August 2005.  Since 2012, home prices have enjoyed an annual increase of 8% or more.  Sellers have typically enjoyed the upper hand due to multiple offers and low inventory.  However, buyers now seem to be more resistant to making full-price offers, and many offers are coming in well below asking price.

Brokers typically expect a slowdown in mid- to late August due to the start of school, however, this slowdown started earlier and is lasting longer than expected.  A number of factors could be contributing to the decline in home sales, such as the lack of inventory and new listings and uncertainty about the upcoming presidential election.

While the last few years have been a seller’s market, it appears the market may be leveling out a bit.

 

What Trends Are Ahead for the U.S. and Bay Area Housing Markets?

September 8th, 2016   by lisasheppard

selma_masthead

Leading expert and economist, Selma Hepp, weighs in on what the future of the real estate market holds.  Millenials are becoming a large percentage of the home buyer market, although affordability and student loan debt continues to be a challenge.  Mortgage creditors will need to accommodate for the changing face of the buyers market, as minorities will account for all homeowner growth by 2020.  Income inequality is becoming an ever increasing challenge as middle-income households has decreased from 65% in the 70s to 40% today.

Click here to read the full detailed analysis.