For Sellers

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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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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While the demand for homes and shrinking inventory continues, the demand for million dollar homes in Sonoma County is seeing an increase and are continuing to generate the biggest growth in residential sales.

In the first 3 months of this year, sales of homes priced at $1 million or more increased by over 38% from last year and have quadrupled in the last 5 years.  The wildfires pushed many stranded homebuyers to seek replacement properties in the million plus market and put many more home buyers in the buyer pool.  Add to that the home appreciation in prices, placing more homes in the million dollar range, and that many Bay Area buyers are looking to Sonoma County as the Bay Area becomes increasingly less affordable.

During the first quarter of 2018, million plus homes comprised one in five sales.  Five years ago, that figure was one in 20.  In years past, million-plus dollar homes would take many months to sell; some buyers are now seeing their homes sell within a few weeks.

The rebuilding process for those trying to rebuild homes after the wildfires has been full of challenges, especially for certain neighborhoods. The future of housing in Fountaingrove is so uncertain with the community having to replace its water system.  Homeowners that were looking to rebuild now face the possibility of joining the buyer pool.  Other homeowners have opted to purchase rather than rebuild.

Many fire survivors are in a position to offer strong bids when competing for homes because of insurance settlements, further driving sales and home appreciation.

The shortage of available homes and high pricing throughout the Bay Area will continue to keep the Sonoma County real estate market strong for most of 2018.

Filed under: Blog, For Buyers, For Sellers, General Information, Santa Rosa by lisasheppard
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The median home price in Sonoma County increased to $689,000 in February, an increase of 2% from January and 14% from a year ago.  This median price sets a new record high for Sonoma County homes, where inventory shortages have been exacerbated by the October wild fires.

In order to secure homes, buyers should expect to bid at least 5% above asking price.  Driving up the price were buyers that were scrambling to secure homes after the destruction of over 5,300 homes in the county. Since November,  new listings increased by 26% and sales by 14%. Winter sales, normally subdued, were robust this winter with over 261 homes purchased in February alone.

County home sales typically increase in the Spring, which means an increase in bidding wars to secure a home.  Many buyers are placing all-cash offers in an effort to win a bidding war.  With fire victims receiving insurance cash payouts or back in the market to purchase after having rented, this means that buyer demand will again likely exceed supply, possibly driving up prices even further.

While home prices are becoming out of reach for many Sonoma County natives, buyers from the Bay Area and other counties where home prices are highest still consider Sonoma County an affordable place to live.

Filed under: Blog, For Buyers, For Sellers, Santa Rosa by lisasheppard
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October’s wildfires left behind much destruction, with many victims now faced with the process of rebuilding.  Prior to the wildfires, home prices were already steadily increasing and inventory shortages had been the norm for quite some time.  It is difficult to estimate how long the rebuilding process will take, as some homeowners will rebuild and others may opt to sell their land to investors.

California is no stranger to destructive wildfires and communities rebuilding and coming back strong.  Recall the devastating Oakland Hills fire that occurred in October of 1991 and damaged more than 2,900 structures. Prior to the fires, the affected homes were older 2 & 3 bedroom homes estimated at $300,000 in the early 90s. Many homeowners that rebuilt constructed homes that were larger, and home values jumped to $700,000 in the mid-90s.  Despite the wildfire, Oakland Hills to this day remains a very desirable place to live.

Prior to the wildfires in Sonoma County, the median price jumped to $587,000 in September.  Because the North Bay offers more affordable housing in comparison to the Bay Area and Marin counties, home buyers often flock to this area due to affordability and quality of life.  This has led to the ongoing challenge of low inventory, and steady increases in median home prices. Demand has continued to exceed supply, with new construction still not adding enough homes.  At the current pace of new construction, it would take at least 2-1/2 years to replace homes destroyed by the fires.

Heightened demand for homes will continue to impact pricing and inventory, and will likely lead to another temporary spike in home prices.  The question is whether displaced families will be able to afford these price increases.

The long-term impact of the fires remains to be seen, as well as how long it will take Sonoma County to return to a sense of normalcy.  Sonoma County residents and businesses have shown incredible resiliency and a strong desire to rebuild affected communities.  While Sonoma County may take some time to rebound and rebuild, we are confident it will remain a highly desirable place to live.

Filed under: Blog, For Buyers, For Sellers, General Information, Regional News, Santa Rosa by lisasheppard
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