Sonoma County home sales were a bit sluggish last month and declined 17% from a year earlier, with buyers purchasing a total of 450 homes, the lowest number in five years. Add to that, the number of new listings hitting the market declined drastically, 20% from a year earlier and to the lowest level in seven years. This means that the already tight housing inventory will become tighter, with fewer properties on the market and high demand. These numbers have agents and brokers puzzled as to what is going on, with summer typically being the highest number of home sales and listings.
Elsewhere in the state, six counties reported declining home sales of over 10%: San Francisco, Marin, Alameda, Contra Costa, San Mateo and Santa Clara.
Madeline Schnapp, PropertyRadar’s director of economic research, predicted that the slower sales will continue in urban communities and extend to suburban areas like Sonoma County, with higher-priced areas feeling the effects first. Madeline indicated that tight inventory and high prices could mean a pause in home price increases through 2017.
Sonoma County’s median price here hit a record high of $619,000 in August 2005, then sank to a low of $305,000 during the economic recession in 2009. The rebound of the housing market is now in its fifth year and each year median prices have risen an average of 8% or more.
Brokers will be watching home sale activity in the coming months because a drop in demand typically leads to a slowing or even a halt in appreciation.