Wine Country And Horses

One of the benefits we offer our buyer and seller clients as realtors is the marketing and networking we do with each other prior to the actual date when properties are “launched” on the MLS. Buyers who are most actively looking and ready to buy are generally working with a local agent who is keeping abreast of not only the current homes and country properties on the market, but those that are coming up in the next month or two. As a seller, this networking and advanced marketing is a benefit to you because it can shorten your time on market and maximize your exposure to the most qualified buyers.

So my curiosity was piqued yesterday at our local meeting in Santa Rosa of Coldwell Banker agents from around Sonoma County (over 110 total–thought not all were there). There were approximately 4 new country properties suitable for horses annouced as up and coming, which is a pretty healthy amount and not typical. One is in Glen Ellen and sounded interesting due to the proximity to some great riding at Annadel and Jack London State Parks. (See my post on the miles of trails in Sonoma County.)It sits on 4 usable acres with a 4 BR 2 BA single story home of about 2200 sf.

Another is in NE Santa Rosa on 2 horseable acres with a 2500 sf home. This latter is a pocket listing–it will not go on MLS any time soon but is available to be seen and priced at $1.2 million.

If you are looking for 4 acres and a view home and granny unit in Sebastopol there will be a new listing meeting that description in the Sebastopol countryside coming up in a week or two. The home is about 2600 sf with 4 bedrooms and the granny (guest) unit is about 840 sf. According to the agent this is a horse property as well and will be priced at about $1,175,000.

Another up and coming property on the Sebastopol border with Santa Rosa has 4 level acres and a 2000 sf house and will be priced at $1,095,000. I know of a couple of other pocket horse property listings and have a couple of my own upcoming that are or will be suitable for horses. I will be checking all of these out as they come up, because, as a horse owner, my definition of suitable for horses may vary from an agent who is not a horse person. All land is of course not equally usable, and it depends on your riding discipline, number of horses, etc.

There is another NE Santa Rosa country property suitable for horses coming up in a couple of weeks in the very horsey and beautiful Riebli Valley (horse and wine country par excellence!). Also four acres and priced in the $1.1 to $1.2 million dollar range.

If I can provide any information for you about these or any other horse properties, please let me know!

It is going to be a gorgeous day to check out the latest West County new listings (Sebastopol MLS tour) tomorrow–I will have on my walking shoes and sunscreen, and James the trusty navigator on my TL will be well rested so he can plot out the best driving strategy for me and Izetta and hopefully another pal or two so we can economize on gas. (author’s note:  I had hoped to Twitter my way through tour but that didn’t happen this week, maybe next time.)

Hopefully there will be some good munchies provided by the hosting agents since for some reason there are a pile of properties this week when there have been very few the last week or two. It is important for listing agents to incent their peers to tour their new listings, especially in a crowded field.

At one property last year (a country property listing of mine in Sebastopol) had so much going on that in order to convince agents to wait around and smell the roses, i.e. learn all the property had to offer, I had a masseur doing chair massages in one room, a lender pouring hot-mulled wine and apple cider in the kitchen, and bagels, lox and cream cheese for all. Two of us directed traffic and parking as well. I lost my voice after hours of tour-guiding. It was worth the effort because we had 3 offers the first week and sold for over asking to a buyer who is now very happy in his new country home. This in last year’s down market. What kind of creative broker tour incentives have you seen?

Anyway, I will report on the latest new West Sonoma County properties after tomorrow’s tour.

Heard on the Grapevine: In Healdsburg, I know of a great new listing coming up in early July–a classic Craftsman bungalow walking distance to the Healdsburg plaza. About 1600 sf with a new roof and paint, new deck and some interior updating, but a lot more room to improve (including the stand-up full length attic), or liveable and rentable now. It will be very competitively priced on a street with some gorgeous vintage homes. More info in the coming weeks.

Enjoy the lovely summer solstice week and tune back in for the tour and gravevine reviews and news. I also just received the latest Sonoma County Real Estate market stats so I plan to have a busy week of writing ahead. Headline: Sales continue to rise on the entry level of our market. Investors and first time buyers, and some first time investors (!) are out in force. Every day I receive an email report on the number of offers on bank-owned (REO) properties. Lots of multiple offers out there on the best ones with the best locations and best bones.

Help! There is not enough country property for sale in Sonoma County. I have buyers and very little to show them at the moment. Sebastopol, Healdsburg and the Valley of the Moon in particular are very low on new country real estate for sale. A really lovely piece of land with two legal units in an estate setting between Graton and Forestville just went into escrow with multiple offers. A charming farmhouse with two studio buildings and a small horse setup privately situated just 5 minutes outside of Sebastopol is in contract with multiple offers. An all cash buyer, rumor has it, plopped down nearly 2 million in cash (pending inspections) for a GORGEOUS 20 acre piece with a classic coastal home and large studio building within a week of entering the market. I think sellers are hunkering down due to the negativity in the press and uncertainty and fear in the economy. But well-priced, well marketed and properly prepared homes in Sonoma County, particularly country property, will sell quickly. There are a lot of buyers out there who have gotten off the (classic 3 rail wood board) fence who are looking for new homes or weekend getaways. If you have a country property in Sonoma County that you want to sell, please contact me for a free market analysis!

I felt a bit non-plussed when the Santa Rosa Press Democrat posted a very gloomy (yet again) outlook on our local real estate market, indicating the low level of sales (167) for the month of January and the year to year drop in the median price.   Sobering facts indeed and at first glance my previous post, Sonoma County Market May be Picking up in 2008 , made me feel that I might be perceived as having the typical realtor Pollyanna view of the market.  How embarrassing!   However, if you read my post closely you will note that I mentioned that the number of PENDING sales (266)  is up higher than any month since last July just before the subprime mess hit the fan.   So perhaps there is a glimmer of hope after all. It is also interesting that the PD failed to mention a month to month increase of nearly $50,000 in the median home price for the county.  Of course month to month numbers are not really as telling as year over year comparisons, but you can be sure they would have mentioned it had the price gone DOWN on a month to month basis. 

Just got an interesting email from my broker Rick Laws.  Rick compiles many of the Sonoma County real estate market statistics used by the Press Democrat newspaper.  I ‘ll have more in depth reports on January 2008 real estate sales in a couple of weeks.  But briefly, Rick says,

“There are 260 pending SFD sales reported (so far) for January. That is the strongest month since last July.The median price has bounced back up to $500K from $466,500 in December.” 

 As many of you know, the market for country property in Sebastopol, Healdsburg and parts of Santa Rosa, has been reasonably strong.  What is interesting is that we are seeing much more activity at the troubled lower end of the market, with many more multiple offer situations on short sales and REO’s.  Maybe buyers are starting to notice that here are some great bargains out there in Santa Rosa and Sonoma county real estate.  More information as the data comes in….

Last Sunday I held open a wonderful country property in Sebastopol, listed by my good friend and colleague Izetta Feeny. It is a great value, a four bedroom house on nearly two acres withing good commute range of San Francisco. The family that currently owns the house home schools their four children there and there is an assortment of goats, chickens, geese and two miniature donkeys and four big dogs that round out the family. The house is nicely situated on a knoll with 360 degree views of the surrounding countryside and hills. This morning I bet they can even see snow on some of those hills.

As the house is set at the end of a series of country lanes, I was curious how people found me. It turns out that all of the eight parties or so who came by had found about the open house via our on-line ads. People had driven from as far as Fremont and Oakland with their children to see this one house, and one person came with her realtor. We had a great time chatting and comparing notes. In 1998 I was doing the same thing, driving up to look at properties on weekends from my home in the East Bay.

Like me many of these people were looking for a different lifestyle, but concerned about what they might give up by being “so remote”. I had to laugh because I certainly don’t feel that way any longer. Seems like a lot of people want more room to roam, either for themselves, their children or their four legged friends.

As we enter 2008, everyone is wondering what this year will bring for the real estate market.   Typically January sees relatively low inventory levels as sellers wait to bring their homes on the market for the conventionally busy spring buying season.  Many properties that didn’t sell in the previous year are withdrawn for the holiday season and brought back on in the new year.   According to Ann Scherbert’s post, the situation is similar in parts of San Francisco.

How to know what to expect as spring comes on?

 In looking at this winter’s inventory levels, it is interesting to see the disparity in three distinct Sonoma County real estate markets.   Market activity here varies greatly depending on location and price point but some cities on an aggregate level appear to be more hurt by the slowing market and morgage trends.  For example, Santa Rosa inventory levels are down this January over the peak last summer and fall.  However there are nearly 1100 single family homes for sale versus just over 700 at this time last January.   There remains a lot of undigested inventory from last year and some incredible bargains are to be had.

In Healdsburg and Sebastopol, levels are very similar to last January’s, and still showing a seasonal adjustment.   What do you think that bodes for each marketin terms of prices?

You can see that in Sebastopol, inventory figures have trended down from a peak in August of 2006 and are actually over 10 percent lower than a year ago at this time.

  Healdsburg inventory levels are just slightly (10%) higher than last January with a much smaller sample size than Santa Rosa, certainly within the same ballpark as a year ago.  Both Sebastopol and Healdsburg are smaller communities than Santa Rosa, and real estate values there tend to trend higher and to attract a higher percentage of second home or lifestyle buyers than Santa Rosa as an overall percentage of sales, whereas Santa Rosa has a much larger chunk of entry level homes and larger scale housing tracts, which have been more impacted by the subprime mortgage crisis.    How will this glut at the lower end ultimately effect our higher end market?    Kevin Boer has an excellent post on this phenomenon in the mid-peninsula market of the San Francisco Bay Area.  I’ll comment in more detail on this topic and prices in another post.

Some local MLS’s (multiple listings services) are now starting to enable consumers to search “sold” listings as well as actives and pendings.  This has been a controversial move for the old guard in real estate, stemming from the days when the licensed realtor high priests held data to themselves and were able to pronounce as from the Oracle of Delphi, what property values might be for a given potential listing or buyer purchase.  Not hard to hold that data tight to your chest when the only access was the printed MLS book updated weekly.  A little impossible to defend in the days of Zillow, etc.   Personally, I want my clients to have as much information as possible so they can make informed decisions, and we work as a more powerful team that way.

Pricing residential country property is very challenging-there are so many variables to consider beyond beds and baths, square footage and age, location and condition. The size and condition of the septic system, the condition of the well and its capacity and water quality, zoning, expansion possibilities and more. (If you would have told me back at Swarthmore that I would become reasonably expert in any of these issues –especially septic–I would have doubted your sanity. Since a good 70 percent of the properties in Sonoma County are on well and septic, one of the most valuable services I can offer my clients is my ability to work with them, along with a team of experts  to carefully ensure that a property will be suitable for their needs, now and the foreseeable future. There are many great resources and people available to assist in the process, and an agent knowledgeable in country property can streamline the search and buying process for their clients, and help them to avoid pitfalls.

But the true wildcard in valuation of country property is the setting. An exceptionally private, serene setting with pastoral or dramatic views, in a tranquil location of (name your pick) wild hills and orchards, vineyards, horse farms, quaint farmhouses, redwoods or oak-studded hills, or various combinations of these, have a perceived value to the buyer that is very difficult to value.  It seems that many out of town buyers coming to a wonderful destination such as the wine country of Northern California, all want the proto-typical vintage farmhouse with wrap-around porch in a scenic setting.  They dont’t want to see or hear neighbors close by, and they’d probably like to see (or own) a vineyard or two.

 Is the setting wild card factor worth $20,000 per acre, or more? Will a property be so gorgeous or secluded that someone will “overpay” by six figures?  Is it really over-paying if a willing buyer puts the money on the table?

A client and I  viewed a property priced at $1.1 million the other day that perfectly met my buyers’ needs for a weekend home in Sonoma county. By all rights, and based upon extensive touring, the property, in my opinion and the opinion of many agents I know, should have been priced under $1m, possibly closer to $950Kor $925K, even if in perfect condition. However, it was exactly a kind of property that would be a perfect weekend retreat for someone from the city, with privacy and views on a less than 2 acre parcel that would be difficult to match. The property was in apparently poor condition with an older septic system, unknown pest issues and in a low water area.   I told my client that even though the property was extremely overpriced, someone could come in from SF or the peninsula with an out of town agent and pay the premium, since, as one friend said, you can hardly buy an outhouse in Palo Alto  or SF for a million dollars, so what is the big deal if it meets the intangible need for peace and quiet on Sunday morning.

This is every sellers’ secret fantasy:  that Brad and Angelina (or a Google couple flush with exercised stock options) will fly in on their jet and fall so in love with their property that they will throw caution to the winds and over bid.  Sadly, that almost NEVER happens, and the property sits.  I guess every once in a while the exception proves the rule, though. Back to the country retreat I mentioned above.  This summer I have seen almost everything that meets that description in Sonoma County, and sold several country properties to buyers from the Bay Area and elsewhere, some for weekend homes and some for folks who moved up full time from San Franciscio, Belmont and the East Bay.   As we were preparing to write an (perhaps insultingly low) offer on the aforementioned shangri-la, the listing agents informed me that his sellers had accepted a one million plus offer from the SF buyer and his SF agent, and they were “going to take the money and run”.    The property is still in its contingent period, and the price may be negotiated down further once all the inspections are complete, but I learned a lesson–you can never truly put a number the intangible value that a fabulous setting brings to a country property.

Have you ever visited the US Army San Francisco Bay Model? It is really great to see when the model is running and you can view the really complex tidal patterns that circulate through San Francisco Bay–I had the chance once when I attended a sailboat racing lecture there–tides being really critical to your success racing on SF Bay. With Homescopes, I hope that we can use our informal network of agents on the ground, to help us as a region get a feel for the ebbs and flows of our inter-related Northern California marketplaces.

Many of us in the real estate market in the North Bay are fairly convinced that our market in Sonoma and Napa is very influenced by the strengths and variations of the Bay Area real estate market whether in terms of general trends (Hot, Cold or Indifferent) as well as localized effects such as the tides of Palo Alto and the Peninsula, San Francisco and the East Bay Insterstate 80 corridor. I spoke to my friend Izetta Feeny yesterday, a long time Coldwell Banker agent in Sonoma County and shared with her the 3 Ocean’s Real Estate recent post about rapid median price apprection in Palo Alto and other selected markets in the Bay Area.

“Oh! That’s good,” she said, “That means we’ll see the effect up here in 8 months.” As if the rising tide of the heart of the Bay Area’s market would eventually ripple north to Sonoma and Napa counties and lift our boat. When our boat is eventually lifted by the Bay Area high tide, we attract at least 2 types of buyers from out of town: entry level buyers who can’t afford to live where they work in Marin or San Francisco, and upper-tier buyers with equity in strong, competitive Bay markets that want a lifestyle change and move here full time, or who are looking for a weekend getaway or wine country estate. As the most desireable markets in the Bay Area are strong, then we see a more immediate impact on the markets that will serve the budding country squire (and squire-ess). Virtually all the buyers I have worked with this year fall into this category of new “lifestyle” immigrants to the wine country.

As you view the upper quartile median price points for many of Sonoma County’s cities (well, towns), the cities with the most cachet for out of town buyers: Sebastopol, Healdsburg, Glen Ellen, Kenwood and Sonoma, all have much higher upper quartile price points. Counter-intuitively, there are wide fluctuations in the upper quartile of some of our markets (Kenwood and Glen Ellen, Healdsburg) but that is because upper quartile price ranges are much broader, and with the small sample size of these areas, are subject to wider swings when a large vineyard estate sells for $4 to $6 million or so one month but not the next.

The greater majority of our upper tier markets hover in the $1M to $2M range, with increasing forays into the $2M range.

There are different tidal patterns and forces pulling these buyers to the North Bay. So a typical Palo Alto homeowner who wants to stop and smell the roses (or the grapes) can trade in their little rancher ($2 to $2.4 million) near Hamilton or Emerson and live like the landed gentry up here with 2 to 10 acres of privacy, views or room for horses or farming. Or a stunning retreat property for weekends and holidays. This Sonoma County potential buyer has been pretty immune to the ups and downs of the general market and the subprime lending crisis. They keep the upper and sometimes the 2nd quartile markets steady and strong. Which is why we see well-priced and presented country properties moving quickly (i.e within a month or two) while many many single family tract homes and condominiums in suburban locations in Petaluma, NW Santa Rosa and Windsor are languishing. The lower quartiles are currently more impacted by the uncertainties in the mortgage markets, plus the hordes of amateur investors are back in the stock market and not investing in real estate.

These are the types of homes (typically the bottom one or two quartiles) that will be snatched up by Bay Area renters and workers who will commute to their jobs from the North Bay. Yesterday I showed one of my listings to a young, first time buyer and his agent from San Rafael. He is on the hunt because he perceives value in the lower quartile of our market, and rates are down, affordability is up. So the currents ebb and flow.

These buyers have been staying away but seem to be cautiously returning. The Palo Alto potential country squires never really left. Many of the smartest buyers know that now is a good time to buy, with low rates and lots of choice. The real illusion that some buyers hold is that they can somehow divine the low point of the tide and time their entry into the water. That is even harder to do with real estate than the stock market. Just take a look at the San Francisco Bay model to see how complex these currents can be.