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An annual Summer slowdown in the North Bay housing market is the norm as buyers focus their attention and energy on summer activities.  However, local experts indicate that there might be something more to this slowdown with homes remaining on the market much longer and, in some cases, price reductions becoming necessary to sell the home.

Sales in Napa and Sonoma counties in the first five months of this year were down 11% by volume from that pace a year before, down 17% in dollar volume and down 7% in average selling price, according to the latest Bareis listing data.  A healthy market typically has enough inventory to equate to one-third of the listings in any price range in escrow at any given time. A balanced market has three months of inventory, any more than that trends towards a buyer’s market.

Currently, Sonoma County inventory is sitting at two months’ supply.  There were a total of 560 new sales in May, up 21.5% from a year before. But  inventory of high-end homes (over $1.4 million) was 7.2 months, up 50% from a year before.

The hottest markets in Sonoma, Napa and Marin counties are Petaluma and Rohnert Park, particularly for homes listed under $1 million. They have 37% and 133% more listings, respectively, and brisk sales are keeping their inventories to just 1.5 months.

Today’s buyers are more selective and are looking for the 3 “L”s:  lot, location and layout. Flat lots in nice neighborhoods that are close to shopping, schools and parks are a hot commodity, as are homes that are turnkey and do not require any major work or improvement. Buyers previously did not shy away from fixer-uppers, but these homes now have to be listed at super low prices because buyers know that the cost of construction materials have increased since the fires and tariffs. The new lumber tariff of at least 20%, depending on the mill, has added about $9,000 to the cost of single-family homes and about $3,000 to multifamily units.

Well-priced homes are still getting multiple offers and selling quickly. The current North Bay housing market is not a strong seller’s market like it has been in the last eight years, however, it is not necessarily a buyer’s market yet either. Well-priced homes are still getting multiple offers and selling quickly.

Filed under: Blog, For Buyers, For Sellers, General Information, Regional News, Santa Rosa by lisasheppard
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Luxury homes and estates in Sonoma County are poised for buyers from San Francisco or Silicon Valley…buyers looking for a second home or vacation home who are seeing the perfect Wine Country residence.

The latest wave of Bay Area tech companies that have started up or are expected to go public this year equates to the potential for thousands of new millionaires looking for high-end luxury estates.  According to date scientist Deniz Kahramaner, wealth from tech companies typically takes a year to two years which is when you can expect to see more tech money being pumped into the housing market.

While the expectation is that the majority of workers will likely remain close to San Francisco or Silicon Valley, many companies are now affording employees the opportunity to work from home.  The influx of money and demand on the Bay Area housing market will continue to fuel long-term price increases. People gradually move out to more affordable areas where they can get more for their money.

Sonoma County is the ideal location for many of these luxury buyers looking for the wine country lifestyle.

Filed under: Blog, For Buyers, For Sellers, General Information, Regional News, Santa Rosa by lisasheppard
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Santa Rosa is in desperate need of homes and apartments, and city officials are pulling out all the stops to make it happen, including waiving development fees and relaxing rules on a scale not yet seen in the area.

In March, the Bay Area Council business association invited dozens of developers, investors, architects, brokers and others in the building industry on a tour of Santa Rosa to scope out the city’s potential. The response was overwhelming — the council filled a bus in 48 hours, and nearly 70 people ultimately joined the trip.  Developlers walked away with a new appreciation for the area after touring Santa Rosa and seeing first-hand empty land, vacant buildings, parking lots and garages that could be turned into housing.

Officials estimate Sonoma County has a shortage of 30,000 homes after the 2017 wildfires. While rebuilding has begun and communities are bouncing back, officials feel it still isn’t enough. The city is looking to build multi-family rental apartments to house those that don’t want to or cannot rebuild.  And Santa Rosa officials are considering raising downtown building height limits, now capped at 10 stories, and reducing parking requirements.

In addition, they hope to increase the city’s density and population by making downtown Santa Rosa more vibrant. Developers hoping Santa Rosa will be the next hot market still have to win support from the community. Local residents are on board with the city’s redevelopment efforts and of attempts to revitalize the area, but are concerned about the challenges and issues that may arise, including more traffic, less parking, and lower-income residents being priced out of the area.

Filed under: Blog, For Buyers, For Sellers, General Information, Regional News, Santa Rosa by lisasheppard
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Sonoma County sales are off to a slow start this year as many sellers sit tight and buyers wait for further price declines.  The usual winter dip in sales as well as the record rainfall that led to the worst flooding in decades has contributed to a decline in sales and in median home price.

In February, 227 single-family homes were sold in the county, down from 267 homes sold in February 2018.  The median home price also fell to $620,000 down 15% from the February 2018 median home price of $689,000.

Despite the robust first half, the local housing market flattened considerably in 2018. The total value of all single-family homes sold countywide last year was $3.65 billion, almost $60 million less than the $3.71 billion in 2017, the first annual decline in the value of county home sales since 2011.

The wildfires in October 2017 contributed to steep price increases and low inventory/high demand through June 2018.  There was a sudden influx of buyers looking for a place to live and home insurance companies were obligated to provide temporary housing similar to homes lost by fire survivors. Homes listed were snatched up quickly and inventory was depleted. The second anniversary of the wildfires in October 2019 will mark another critical milestone, with most home insurers ending monthly rents on temporary homes for fire survivors, which may translate into more buyers entering the market as some survivors choose to move on.

Many agents feel that sales activity will pick up again during Spring. Through the remainder of 2019, projected inventory of homes is expected to grow by 20%, while the median sales price is projected to increase by 3%.

Filed under: Blog, For Buyers, For Sellers, General Information, Regional News, Santa Rosa by lisasheppard
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Sonoma County’s acclaimed winemaker, Merry Edwards, has just sold her Sebastopol winery to Champagne Louis Roederer, the French company famous for producing Cristal Champagne.  The deal includes the Merry Edwards brand, winery, inventory and 45 acres of vineyard land.

Roederer currently owns three properties in Mendocino County, in addition to wineries in France and Portugal.  This deal marks their first venture into Sonoma County.

Roederer was most impressed with Merry’s distinguished record with Pinot Noir, a growing interest and focus for the company, as well as the fact that she built her winery from scratch.  Merry was one of the great pioneers that broke through gender barriers and made scientific discoveries that were crucial to the California wine industry.

Merry will continue working at the winery for at least another year during the transition.

Filed under: Blog, General Information, Regional News by lisasheppard
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With homes staying on the market longer and buyers rejecting over-priced homes, many Sonoma County home sellers are wondering when and if the sluggish housing market will bounce back.

The slowdown started last summer when buyers started losing interest in over-inflated home prices and the post-wildfire frenzy to find a home diminished, driving the median home price to $639,000 at the end of the year, from an all-time record of $700,000 in June 2018.

Many experts feel the market shift/downturn was long overdue because of the large appreciation in home prices over the last few years.  Rising interest rates, trade wars and stock market volatility are affecting are the housing market and causing a shift.

Home sales in November and December decreased to levels not seen in the last eight years, some of that the result of a natural cyclical, seasonal decline. As Spring approaches, it is likely that more sellers will list their homes and home buyers start actively looking for homes and sellers.

Home appreciation is still expected this year, however, at much lower levels than in past years.

Filed under: Blog, For Buyers, For Sellers, General Information, Listings, Regional News, Santa Rosa by lisasheppard
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November saw a steep decline in home sales and a dramatic jump in available homes…all good news for buyers.  The median home price fell to $615,000 from its $700,000 peak in August of this year, representing a 9% decline.  Home sales fell it its lowest level in 8 years, while the number of homes on the market increased 77% from the same time last year.

Many feel that the correction is due in part to the fact that the wildfires put a significant demand on market availability, driving prices up as buyers were desperate and willing to pay more to secure a new home.  However, many of those buyers have now purchased a home and are no longer in the market and that, along with the typical market slowdown that occurs every winter, is driving a steeper-than-normal slowdown.

Real estate professionals anticipate another bump in the market when fire victims’ insurance payments run out and those who lost their homes and are unable to rebuild will enter market looking to buy a home.

Many feel that a market correction is long overdue.  It has been predominantly a seller’s market for the last few years in Sonoma County, and still remains so but less than in the past.  If the current trend continues, Sonoma County will return to more of a balanced market, which works well for both the buyer and seller.

Filed under: Blog, For Buyers, For Sellers, General Information, Regional News, Santa Rosa by lisasheppard
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Filed under: Blog, For Buyers, For Sellers, General Information, Regional News, Santa Rosa by lisasheppard
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When the financial crisis of 2008 hit, American’s financial system “was shaken to its core” as quoted by the Wall Street Journal.  Millions of homeowners lost their homes and jobs, small business owners were forced to close, dreams of higher education were destroyed and the divide between the rich and poor widened significantly.

The effects on Sonoma County were profound.  Over 15,000 homeowners lost their homes to foreclosure and those properties were snapped up by investors at recession level prices.  The loss of middle-income jobs, homeowners that were forced to rent, underfunded pensions and owners that were overextended with credit all felt the impact of the financial crisis.

During this 10-year timeframe, housing wasn’t getting built because developers could not secure financing or take the risk and homeowners couldn’t get home loans due to tightened credit standards.  Prior to the receission, builders were adding approximately 1,585 homes per year in Sonoma County.  Had the recession not hit, that pace would have continued and Sonoma County would have had an additional 10,400 homes.  With construction coming to an almost halt, builders only average about 280 homes a year.

In 2014, Sonoma County developers and bankers finally saw a turnaround and the housing market came alive again, with local developers starting to build again in 2018.  With banks still cautious about lending, local developers have had to find financing through private investors.

Couple this shortage and housing loss with the October wildfires, which destroyed over 5,300 homes in Sonoma County.  Developers are working hard to rebuild for homeowners that lost homes and to design new communities, but with the significant loss of homes over the years and increasing demand, developers will be challenged to rebuild Sonoma County in ways that meet consumer demand and affordability.

Filed under: Blog, For Buyers, For Sellers, General Information, Santa Rosa by lisasheppard
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The median price of a home in Sonoma County recently increased to $705,000, up from the previous record of $689,00.  This is great news for existing homeowners as many have seen the value of their home appreciate steadily over the last few years.  However, it poses challenges for those looking to break into the housing market.

Over the last nine years, home prices have increased by 131%, from a low of $305,000 in 2009 to $600,000 in June 2016 and now to $705,000 in June 2018.

As more fire victims rebuild and more new housing construction projects become available, there is hope that the housing market will stabilize and prices will level out.

Filed under: For Buyers, For Sellers, General Information, Santa Rosa, Uncategorized by lisasheppard
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