Wine Country And Horses

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.

Santa Rosa is more than the largest city in Sonoma County, more than the largest city between San Francisco and the Oregon border to the north. It sprawls across over 40 square miles and is home to 160,000 people–half of it to the West of Highway 101 stretching towards Sebastopol, home of not only to vintage Railroad Square and newer subdivisions but farmlands, vineyards and equestrian properties in the Willowside and Olivet areas and over to the Laguna de Santa Rosa. To the east of 101 is downtown Santa Rosa, flanked by numerous charming communities of vintage homes, from Fountain Grove to Bennett and Rincon Valleys and Riebli Valley wine country. Many out of town buyers are not aware of the geographic diversity and gorgeous countryside in Santa Rosa. Here is a lovely video vignette produced by Sonoma Uncorked.com You can search the most up to date listings of Santa Rosa homes and country properties for sale with my compliments by going to the search page of this website.

Santa Rosa CA Video

When Sonoma County real estate prices were booming in 2004 and 2005, those of us who sell country property noted that appreciation was lower for country properties than it was for “standard” homes on suburban lots. Now we know why–it was the rapid expansion of mortgage lending to first time buyers and investors which really spurred the market for entry level homes. It did ultimately push up the prices for country homes in the county.

I thought I would pull the most recent sales data from our MLS (multiple listing service) to see what price trends have been like for country property over the last two years. For the purposes of this post, I pulled homes listed as single family residences or farms and ranches on lots of 2 acres or more.

You can get a property that might feel like country with a smaller lot size, but 2 acres seems like a practical dividing line in terms of what most people want. The County of Sonoma uses 2 acres for a dividing line for some of the zoning designations in terms of housing density, allowing second units on some lots of 2 acres or more. (note: don’t assume because you are interested in a property on 2 acres that you can build a second unit on it–it is way more complicated than that, contact me for specifics).

A 2 year low 12 units of country property sold in March of 2009 and 2009. The highest month’s sales total was 33 last October (very interesting due to the financial markets last fall.) The rate of sales seems to be picking up in the second half of this year. It generally bounces around in the teens and twenties, spiking towards 30 occasionally. Not the largest sample size which is why I am including all county sales in these figures as opposed to breaking out Healdsburg or Sebastopol for example.

Median price of country property in Sonoma County is down 14% since November 2007 when it was $1,200,000 versus $1,037,500 now. The lowest median price was in February (surprise!) at $620,000, just showing only the least expensive properties were selling last winter, not that individual property values fluctuated so much.

Months Supply of Inventory is at a two year low of 6 months at the end of November versus 19 months two years ago–with a high of 35 months supply in June 2008!

Here is the graph of median price as well as the underlying data. You can click on either of the images to enlarge them.

But what about Sonoma County and Northern California? If you read this article in the business section of today’s New York Times, An Upturn in the Housing Market May Be Reversing – NYTimes.com you’d find very justifiable skepticism about the increase in real estate sales volume nationally that we’ve experienced this summer and fall. As some friends and I discussed at dinner in Healdsburg Monday night, no one is convinced that the economy is on firmly recovering footing, Wall Street enthusiasm aside. So are we up for a “W” recovery–meaning another downturn in housing prices? From the article, which discussed the latest Case Shiller Housing Index Report:

The two housing price reports lag, by a month, the figures on the volume of home resales, which were issued Monday for October. Home resales jumped 10.1 percent to the highest level in two years, better than analysts had expected.

Much of the increase was attributed to the $8,000 first-time buyer’s tax credit, which had been set to expire Nov. 30 but has been renewed through spring. Buyers who have already owned a home are now eligible for a $6,500 credit.

While brisk sales volume should, in theory, push up prices, Maureen Maitland, the vice president for index services at S.& P., said the oversupply of inventory was acting as a brake. “You can look down the street and have 10 houses to choose from,” she said.

About 3.57 million used homes are for sale, a number that has been declining but is still higher than the historic average. It represents seven months of inventory at the current sales rate.

Ms. Maitland speculated that the housing market might follow a “W” pattern, as the price lows plumbed last spring are tested again this winter.

It’s all well and good to look at national statistics, but (and this is a cliche so forgive me)–looking at the national housing market to try to determine what is happening with home values in your neighborhood is like trying to know what the weather will be like by knowing what the average temperature in the US is at any given time. Just look at the paragraph above–7 months available inventory nationwide.

In Sonoma County we have less than three months of inventory available county wide, and less than two months at the lower price ranges. Even at the upper price ranges we have about 10 months of inventory and I suspect that is changing as we speak. Next week I will take a look at the market for properties priced over a million dollars. (In Sonoma County that would be considered high end.) In southern Marin, Palo Alto, Piedmont or San Francisco $1 to $2M for a house will get you a tract house or nice condo.)

I have been struck by how active our market currently is, and how many properties at the mid to upper price ranges have been selling in the last month or so, after laying dormant for so long. I think buyers in those price ranges are perceiving good value and striking quickly when they see what they want. A property closed in Healdsburg yesterday: the quintessential wine country farmhouse on 12 acres in Dry Creek Valley, pool, nice house, vineyards, wrap-around porch. It was listed at $2,650,000 and received four offers, selling for $2,825,000. I am told there was a backup offer over the eventual sales price.

Another stylish property on acreage with lavendar and olive fields in Sebastopol, sold recently after receiving four all cash offers, for about $1.7 M. Stylish properties, well-priced with classic locations and settings, are finding that there are buyers out there who have decided that it is again time to put there money in wine country real estate. I am also hearing the same kinds of stories from agents in San Francisco, the East Bay and the Peninsula.

Will this last? How will values be affected? It is too soon to tell, but interesting to signs of life in parts of the market that were dead most of this year. One factor which encourages me is that the tech companies in the Bay Area are experiencing sales growth, venture capitalists are investing in startups again, and the IPO market has some life, witness the succesful IPO earlier this year for Open Table. Facebook is starting to take some steps along their path to a public offering–all those factors are positive ones in our Bay Area economy. After so long a time of negative news and still a lot of hard times for many people, there do seem to be some glimmers of hope. And as I noted in one of my earliest blog posts a couple of years ago, the rising Bay Area real estate tide definitely floats Sonoma County’s real estate boat.

Today I had the pleasure of walking a 7+ acre pinot noir vineyard property with my client, planning our strategy for a maximum impact market debut of her Russian River appellation home. Here’s a sneak preview picture of the Mt. St. Helena view to the Northeast. What a tough day at “the office.”

Posted via email from pambuda’s posterous

The title of my last blog post was so upbeat I was a tad embarrassed on reflection.  Was I just drinking the real estate Koolaid?

 If you read the body of the post last week, you’d realize that my comments were a little more nuanced, but there was good reason for my optimism. I was in the midst of a multiple offer competition on a property in Healdsburg (my buyers are now in escrow and very happy), there were many properties going into escrow in the last couple of weeks in Sonoma County, and not just in the bottom end of the REO pool. Some really special country properties in Sebastopol and Graton that interested a number of my clients sold within a week of coming on the market before people could even get up here from out of town to see them. Open houses were packed all over the county. My transaction coordinator, Alise Posman, had 10 newly opened escrow files on her desk Monday morning and she is only one of several TC’s at our office.

It seems that there is a lot of pent up demand, and people with cash are deciding to invest in real estate here rather than stuff it under a mattress. Some are buying rentals, some are buying homes for the first time. Some are buying weekend homes, or rentals that will eventually become their wine country retirement homes. Some are searching for horse properties and there are some great deals at a variety of price points.

That said, I felt a little sheepish about the headline, given the brutal reality of current conditions in our country. The old title of Richard Farina’s 1966 book came to mind: “Been Down So Long It Looks Like Up To Me”. I guess we are taking these signs of life as encouragement where we can this spring.

No one has any illusions that happy days are here again but there are little glimmers of hope, kind of like the first bulbs coming up in the spring. It will be interesting to see how this year unfolds. But don’t believe if you are a buyer that you will be without competition for the best properties, well-priced and in good condition this spring. If you are a seller take heed, and do what it takes to be perceived as a deal right out of the chute. You might be pleasantly surprised.

The mustard is about a foot high with brilliant yellow flowers, the daffodils have just begun to bloom after pushing up since early December, and it was 74 degrees the other day. We have had two weeks of unbroken glorious weather which is lovely but we are finally getting some severely need rain. Grapegrowers are worried about early bud break, because we still have frost at night and will for some time.

Today my thoughts turned to the pair of mallard ducks who spend their spring break by my pool, bordering some old vine zinfandel that belongs to a neighbor. Generally the last few years, they seem to miraculously show up right around the same time they spring into my mind. Perhaps they are not the only ones tuned into the lengthening days and warming weather?

One of the things I love about living in the country, and being out and about early every morning to feed the horses at more or less the same time each day, is that I feel tuned in to nature in a way that I didn’t quite get living “in town”.

Maybe I should set up a duck cam so I can capture their arrival this year? Last year they showed up on February 25th. I’ll keep you posted when they return, meanwhile, here they are in 2008.   I guess I have intermittent spring fever.

Ok it must be getting close to dinner, but I promised pictures of Sunday night’s home made pizza made entirely with veggies from my Sonoma county wine country garden.  Harvesting the garden right now is nearly a second full time job after realtor.  Had a very casual dinner Sunday night with good friends.  Here is the before picture (before it was devoured.).  Yummm.  Three kinds of cherry tomatoes, garlic, onions, orange bells, poblano, beefsteak tomatoes, pine nuts (not from the garden) basil and some fresh mozzarella.  Maybe I will figure out a tie-in to real estate blogging AFTER dinner.  Bon appetit!

You decide–these photos were taken by good friend Robin Satterlee this morning in the Saitone Vineyard, Russian River Valley Appellation, Sonoma County, California.   The fog was very thick and burned off by noon, but it made for some beautiful contrast in the photos.  Sometimes Photoshop isn’t necessary, just a good photographer and a good eye.

For a Flickr slide show click here.