Todd & Lisa Sheppard
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Regional News

Sonoma County’s Sluggish Housing Market…Will It Continue?

February 2nd, 2019   by lisasheppard

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.

November Saw a Continued Slowdown in Sonoma County Housing

December 24th, 2018   by lisasheppard

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.


Sonoma County Cancels Real Estate Deal to Build More Housing

November 17th, 2018   by lisasheppard

The Sonoma County Board of Supervisors unanimously decided to scrap a plan to sell the former Sutter Hospital Campus in Santa Rosa to a developer that was planning to build 867 housing units on the site.

The vote last month puts an end to a developer’s vision to build a mix of housing on the 82 acre-property in Santa Rosa. After last year’s wildfires which destroyed thousands of homes, Sonoma County has been faced with increasing demand and low supply and availability of affordable housing.

The board chose not to appeal a July ruling from a Superior Court judge who said the county incorrectly decided the sale agreement with the developer was exempt from state environmental review requirements.

Supervisors instead directed county staff members to go back to the drawing board by offering most of the property for sale again. State law requires that the County offer the property for sale to government agencies and qualified non-profits first. Supervisors will give those groups the option to purchase the site, which is comprised of 13 separate parcels, either in its entirety or in smaller pieces.


How will the Sonoma County Fires Affect the Housing Market?

November 2nd, 2017   by lisasheppard

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.


Sonoma County Ranked 19th Among “Hot” Housting Markets

March 8th, 2017   by lisasheppard 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.

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.


Sonoma County’s Housing Market Slowed in July

August 24th, 2016   by lisasheppard

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.

Sonoma County’s Record $81 Billion Property Tax Roll Reflects Economic Turnaround

August 4th, 2016   by lisasheppard

Sonoma County’s taxable properties is at an all-time high of $81 billion, and this increase is due to rising home values, new construction and inflation.  Home values have risen consistently in the last four years, which has helped fuel the county’s economic turnaround.  During the recession, homeowners were seeing property values decrease and many homes were reassessed, allowing homeowners to enjoy lower property taxes during 2008-2010.  However, home values are increasing quickly at a rate not anticipated. This year’s assessment roll is up 5.9% from last year, and up 31% since the start of the recession in 2007.

The strong housing market has pushed the median single-family home price to $600,000 in June, slightly below the all-time high of $619,000 in August 2005.  That is mixed news for homeowners who will benefit from increased equity in their homes and for homeowners who were once underwater, but also means that most homeowners will be paying higher property taxes this year.

The largest increases in property values were in Cloverdale and Rohnert Park, with increases of 7.61% and 7.37%, respectively.  Cotati property values grew 6.36%, Petaluma 6.26%, Sonoma 6.1%, Healdsburg 5.94%, Santa Rosa 5.57%, Sebastopol 5.2% and Windsor 4.88%.

While higher property taxes may not be the best news for homeowners, those funds do provide funding for public schools, local governments and services, and the general fund which helps fund a host of county services and initiatives, such as housing, preschools, roads, and infrastructure.

Sonoma County home values are expected to continue to climb next year, with the property tax assessment roll projected to increase 3%.