The Sonoma County/North Bay housing market is undergoing a transformation, referred to as the “Great Reshuffling” with many remote workers moving in and longtime residents moving out.
As a result of this shift, the housing market has become a seller’s market with very low inventory, high median values and surging sales. A market in which sellers wait to place their homes on the market spells trouble for buyers. The median home price in Sonoma County reached $715,000 in September. Active listings for the third quarter ending in September decreased to about 700, about half of what it was a year ago at this time. In comparison, San Francisco is experiencing a glut in listings that has grown 2.5 times year over year.
Working remotely, San Francisco/Bay Area residents are seeking additional living space and a more relaxed lifestyle. North Bay homes carry significantly cheaper price tags. Bay Area homeowners are able to cash out of their home, live anywhere else in the country and even retire with the home equity. Low interest rates are fueling this trend and providing increased buying power.
Millenials are now entering the housing market as they move into their 30s, rid themselves of student loan debt and establish themselves in the workplace. With higher Bay Area incomes, they are looking to the North Bay as an ideal location to raise a family and are able to overcome price obstacles.
The crossover is happening as long-time North Bay residents are dealing with “fire fatigue”; growing weary of ongoing fire threats, power outages and poor air quality. Burned out residents know that the value of their home has increased significantly, and many are looking to move out of the area or to more suburban locales within the county. The number of residents moving out of the county is offset by the number of San Francisco/Bay Area residents moving in.
With continued demand from Bay Area residents moving to the area and as buyers previously outbid on properties hold out hope for striking deals in the colder months ahead, it is anticipated that the strong market will extend well beyond fall.