Wine Country And Horses

Sonoma County Home Sales Rate hits Two Year High, in February!

February just ended. It was a short, cold and rainy month but that did not deter home buyers and sellers from ratifying purchase contracts on 557 homes, from Santa Rosa to Petaluma, Sonoma to Healdsburg.

Every month I review the latest sales data for Sonoma County homes and country properties and make them available to you. This month there are some very striking results to report. The number of newly ratified sales contracts, which I reported as very high in January, has increased to the highest level in at least two years. Since February is seasonally a very slow, short month, this is particularly interesting.

In addition, Month’s Supply of Inventory is also at a two year low, and only 2.4 months supply of homes are available at the current rate of sales. Many of the homes available, if they haven’t sold in a few months, are purely not selling because they are priced too high for today’s market. This is particularly true for homes priced under $900,000. That means well-priced homes that are priced well and show well, are selling VERY FAST!

What does this mean for you if you are a buyer? If you want to take advantage of the $8,000 first time buyer or the $6,500 move up buyer tax credits, you must be in escrow (newly ratified sale) by April 30th, and close by June. At some price points and for particularly well-marketed, aggressively priced homes, you will likely encounter multiple offers and a competitive market place. It is important to have a good relationship with a strong realtor who is on top of the market so that you can take full advantage of home buying opportunities as they come up.

What does this mean for you if you are a seller? If you have been holding off putting your home on the market, following conventional strategy to put your home on the market in the spring, it is not too early to (A) start the preparations, and (B) think of moving up your timeframes to take advantage of the current low inventory and low interest rates and tax credits. The better you can prepare your home prior to market launch, if you will, the quicker it will sell and the more money you will earn. Please contact me for details.

(If your home is under-water, that is, if you owe more than it is worth, there is some hope the process of selling the home under those circumstances, will be improving in the coming months. That is subject for another post.)

Here are the rest of the data from this month’s reports. (Other points to note–the median price is up 15% versus last February, when it bottomed at $290,000. It is down from a whopping $619,000 a few years ago and down 20% versus February in 2008.)

Sonoma County Home Sales Trends March 1,2010 Pam Buda Prudential California Real Estate

It has become a springtime blog ritual to write about the arrival of the ducks in my backyard, in 2008 and 2009. Kind of like the return of the swallows to Capistrano, or the running the bulls in Pamplona.

Spring is in the air! The sun has come out this week, it is coming up earlier in the morning, and setting later. We are all acting a little goofy after so many weeks of (much needed) rain. I wondered, “When will the ducks be back in the pool?” Right on schedule, the mallards returned. They arrived just after dawn, take a liesurely swim and then sit under an apple tree on the warm pool deck, napping and drying off. Not a bad life. They are the picture of contentment.

Ducks sunning by the pool during their annual visit to Sonoma County

This morning, I wondered “How am I going to make my Ducks in Wine Country Post, Part Trey, the sequel any different than the first two?” (Side note: Do I need to? After all the joy of the seasons is in their repetition. I guess the same could apply to seasonal blog posts.)

Then, serendipitously today, I learned what the ducks and Sonoma County residents both know.
Courtesy of Nathan Halvorsen and the Press Democrat newspaper:

Do you have a smile on your face and a little extra pep in your step? Well, so does your neighbor.

A massive study released Monday determined that people in Sonoma County are happier and healthier than anywhere else in California — and ranked fifth overall in the nation.

The Gallup-Healthways Well-Being Index, based on interviews with more than 353,000 Americans during 2009, asked people to assess their jobs, finances, health habits, mental attitudes and communities.

A large scale study of 300,000 plus Americans, including 750+ from Sonoma County, sponsored by the Gallup organization, determined that Sonoma County, specifically the Santa Rosa-Petaluma area, is home to the happiest people in California, and the community is fifth ranked in the nation for happiness and quality of life, also reported in USA Today.

Yesterday afternoon I took advantage of the first sunny day in a while and drove to the town of Bodega Bay with a friend. We went to pick daffodils on Bay Hill Road, taking advantage of some of the first sites of spring–all the yellow flowers starting to bloom, from daffodils to mustard to gorse. I love the variety of Sonoma County, and I never feel it so much as on a little jaunt to the coast. INSTANT VACATION!

Sonoma Coast Video

This time of year there is an extra good reason to visit the coast. From January to April, if you are lucky you may spot Pacific gray whales as they make their way both north and south between Alaska, where they do their feeding, to the lagoons of Baja Mexico where they give birth to their babies. Here is a link to details. You can find out about volunteers who will be happy to help guide your whale watching.

Last week’s Press Democrat featured an article about the latest monthly home sales figures compiled by Rick Laws. Quick headline: HOME SALES DROP for the third month in a row!

The underlying story is a bit different. Inventory has declined significantly over the last two years. Newly pending sales (homes under contract but not yet sold) rose sharply to 496, one of the highest monthly rates in the last 13 months, even though January is typically slow. That is up 117% over January pending sales two years ago and up 17% over last year.

In early 2010, buyers remained active over the holidays. Pouring rain and football playoffs did not deter them in January, at most price ranges. Unlike last January, when activity was concentrated at the lowest price ranges (under $350K), this year the market is active up to about $800,000. There is also high buyer activity at price ranges from about $1,800,000 to $2,500,000. 37% of buyers in this price range paid cash in Q4 2009, making financing less of an issue for them, and buyers under $800,000 are finding conventional loans easier to obtain, putting the squeeze on sales in between those two price points.

I have compiled a report from the same data used to generate the Press Democrat’s stories and am posting it here. I pulled the data going back two years rather than just one so that the numbers can be viewed in the context of seasonal trends.

Most striking is the extreme increase in unit sales versus two years ago, the extreme decrease in inventory (from 3365 homes for sale to 2070)–thanks to the high rate of sales, and the increase in median price (year over year with last February representing a bottom in prices.) Please call or email me if you have any questions, or if you would like me to analyze a particular home or area. If you are considering selling your home but have been reluctant to do so “because of the market”, please get in touch. This may be a great time to sell!

Sonoma County Home Sale Trends January 2010

Yesterday the Sonoma County Tourism Bureau released version 1.0 of an iPhone app promoting local wineries, restaurants, hotels, spas and more, from your iPhone. It is sort of like a private label version of Yelp dedicated to all things Sonoma County. It has a handy wine finder for example which lets you select a varietal–let’s say Carignane–and then view all the wineries within a certain radius of your location that offer that type of wine.

I already use my iPhone in so many ways when with clients and this tool will be a welcome addition.
So far I have used the iPhone out on location

to show maps, routes, and traffic
to take pictures and videos
to show pictures and videos from listings
to determine the orientation of a home with the compass
to send and search emails and review contract documents
to locate and make lunch reservations
to view the multiple listings,
to make blog posts or Twitter, LinkedIn and Facebook updates
do calculations and more.

Now I can quickly point out what wineries are in range of a given weekend home, point out the latest upcoming tasting event or festival, recommend hotels, etc. I am not a golfer but this app finds all the golf courses within radius of a give property. It looks pretty good for a start and takes advantage of the iPhone environment. Check it out!

Visit Sonoma? There's an App for that!

Good blog buddy, Dave Blockhus, of Coldwell Banker in Los Altos, recently shot this video overview of a home sale on the courthouse steps in San Jose. It is about 4 minutes long and provides a example of auction action occurring all over the US, including Sonoma County.

There were so many home auctions in Sonoma County during the past year that Sonoma county is asking auctioneers to move their business elsewhere as they are clogging up the hallways of the county buildings. Cash investors with certified funds are the only ones welcome at these sales and they are out in force. Fully 18% of homes sold under $500,000 in Sonoma County were cash sales. I am guessing most of those went to investors.

Many of the new listings since Christmas have been bought at auction (and some off the multiple listings) and are being remodelled and flipped by investors. I am seeing homes purchased for $250,000 to $350,000 (cash and as is) for example, which are brought back on the market in 60 to 90 days.

In a typical scenario one of these homes closed in November or December. A construction crew moves in to put in new flooring, baths and kitchens, paint inside and out, lay some sod and voila-the house is back on the market in 60-90 days, staged and price from $400,000 and up. Some investors are doing a really nice job with quality work, employing crews that might otherwise be working on new home construction. Others are doing the bare minimum beyond minimal cosmetics.

There are restrictions on the sales of these homes to FHA buyers, who comprise the bulk of the first time buyer market here in the county. These restrictions were just loosened January 15, 2010, effective February 1, so that a 90 day sale moratorium has been suspended for a year. Previously, an FHA buyer was not eligible to purchase a distressed property less than 90 days after it was previously sold.

More restrictive appraisal and valuation methods will continue to apply for FHA buyers interested in these homes. If the home is priced more than 20% over the previous sales price, the FHA lender will require either a secondary appraisal or an itemized list of improvements to justify the new higher price.

One property I saw recently in Sebastopol on a half acre was purchased at auction for $350,000. The investor put in $60,000 dollars worth of work, staged the home and it went on the market 60 days later. Went into escrow day 1 on the market, listed at $535,000. Clearly there is money to be made in these short term flips, and also a market for quality remodels smartly done. You must closely evaluate and inspect the improvements yourself as a buyer to make sure the new price is justified.

Meanwhile thanks to Dave for his informative video. I don’t think he got an Oscar nod yesterday but he does provide a nice show and tell about home auctions. (FYI: I did a post a couple of years ago about a different type of auction on a grander scale. You can find it here.)

With 2009 moving into the rear view mirror, there has been much speculation among agents, clients and the press about 2010 and what portends in the housing market. Inman News recently published a sobering assessment of the events that will impact real estate markets in 2010, from increasing mortgage rates, tightening FHA credit standards, high unemployment and the expiration April 30th of the buyer tax credits.

Real estate agents and brokers typically look forward to spring as the season where homebuyers come out in force and sales pick up.

In 2010, the uncertainty created by the financial crisis makes it harder to bank on a seasonal uptick in sales — particularly in markets hit hard by unemployment.

Further complicating matters down the road are three potentially destabilizing events that are expected to occur in a tight timeframe during the spring buying season:

* At the end of March, the Federal Reserve is expected to wind up a $1.25 trillion program that’s kept mortgage rates low.
* The Federal Housing Administration’s announcement that it plans to tighten underwriting standards could take effect as soon as April.
* Congress is expected to allow the newly expanded homebuyer tax credit to expire, closing the door on buyers not under contract by April 30 and closing by June 30.

Economists must rely on a certain amount of guesswork in predicting what impact these changes will have when drawing up their forecasts for 2010. Many expect unemployment won’t peak until next year, and it’s almost certain mortgage rates can only go up from record lows.

But housing was hammered so badly, and for so long, that most forecasters expect housing prices to stabilize and sales to pick up in 2010, even if economic growth doesn’t spring back as fiercely as it usually does in a recovery.

“We are definitely in a recovery now, but this has been such a severe recession — we think the financial crisis and the credit retrenchment that’s occurred means this is going to be a fairly anemic recovery,” said Michael Fratantoni, the Mortgage Bankers Association’s vice president of research.

America has moved from a manufacturing to service-based economy, meaning “there’s not as much potential for a snapback” from a recession like the Reagan-era boom of the 1980s, Fratantoni said.

These events certainly will impact markets nationwide, but each area will respond differently. Many of us think that buyers will continue to feel urgency in Sonoma County to avoid rising rates and the expiring tax credit. Certainly, inventory is in very short supply and buyer activity has been surprisingly strong during the holiday period.

Plus, Sonoma County will continue to be perceived as a more affordable alternative to housing in Marin County and the rest of the Bay Area to the south. No one knows for sure how the shadow inventory of foreclosed homes will affect our markets. How many of them will reach the market, and at what rate?

What do you think 2010 will bring?

And most of all, Happy New Year! Thank you for your business, referrals and friendship in 2009. I look forward to working with you in 2010. No matter what condition the market, there are opportunities in real estate if you have patience, think long term and have good planning on your side! If you have any questions about buying or selling a home, please contact me and I will be glad to help you!

Many of my friends and clients are entrepreneurs and small business owners in the community. From time to time in 2010 I plan to showcase them so that you can learn about some unique and vital services to Sonoma County and beyond.

Christian Wright and Gerald Simpkins were friends and fellow Vizsla owners long before they became clients in 2003 when we found them an astonishing 1915 farmhouse on acreage in Sebastopol, since lovingly restored. We sold their charming cabin in Guerneville near the Russian River so that they and their dogs would have more room to roam, and also to be closer to their full-time home in San Francisco, where they ran a successful interior design business, Wright-Simpkins, Inc., serving clients all over the United States.

Gerald and Christian have progressed along a path somewhat typical of second home owners in Sonoma County. At first they left San Francisco on Friday evenings and returned home Sunday afternoon. Eventually Friday reverted to Thursday and Sunday became Monday, stretching the weekend to nearly four days. Holidays meant two week stays whenever possible and they became increasingly involved in the community of Sebastopol and Sonoma County. The house had already had some extensive restoration by the previous owners and Gerald and Christian took it and the grounds to the next levels, so much so that the house and gardens have twice been featured on the West County Garden tour sponsored every year by Food for Thought in Forestville.

In 2008, Gerald and Christian decided to move to Sonoma County full time, and sold their home in San Francisco. The recently opened a small studio and shop in Sebastopol at 2833 Old Gravenstein Highway on the way to downtown Sebastopol. If you care to stop by and visit, you might call first, to 707 829-9177 to make sure they are in.

Oh, and in their spare time in 2009, they neared completion of a project in Kohala on the Big Island of Hawaii. If you, like I, are thinking of tropical weather these winter days, take a look!

Downtown Forestville in Sonoma County is hopping as last minute shoppers crowd tiny Nightingale Bakery, one of many artisan purveyors of local foods. In addition to wonderful baguette, foccaccia and sourdough, you can find local goat cheeses, butter and locally produced salumi. I have never seen this new litlle shop so busy!

Happy Holidays!

# end Sent from my iPhone

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