Archive for the 'Market updates' Category
In the spring of 2011 the median price of a country home with 2 acres or more in Sonoma County was $740,000. Those days and those low prices are now in the rear view mirror as country property sales are hot along with the summer weather.
Today the median Sonoma County country home price with two acres or more is $1,095,000. While you will find country homes listed in the 6oo-800,000 range there is a good bet that there will be multiple buyers lined up for each one and sales prices are exceeding list prices in many cases, some times dramatically.
What does this mean if you want to buy a country home in Sonoma County?
A. Come prepared with a cash offer or make sure your loan approval is rock solid and a TRUE pre-approval. You will want to have at least a 20% down payment to be competitive. Inspection and loan contingencies are still the norm here (unlike closer in to San Francisco and the Bay Area) but the more you can do to strengthen your offer the better off you will be!
B. Be prepared to go over asking price and have your agent find out how many offers you will be competing against so you can make an intelligent offer. HINT: for a less competitive environment, ask your agent about one of the over-priced/poorly presented properties in an area you like. You may find you can minimize the competition by pursuing one of those ugly ducklings.
What does this mean if you are selling a country property?
A. You can take advantage of the competition amongst buyers by putting your best foot forward and hope a bidding war moves your sales price up in to new territory. Homes that following the three P’s: Preparation, Pricing and Promotion will fetch top possible dollar for today’s market by reaching and appealing to the widest possible set of possible buyers. Don’t under prepare because the market is so good anyway the property will sell “no matter what”. When homes are going for 30, 50 or even 300,000 over asking (!!!) you might be leaving a lot of money on the table.
Click on the link above to go to my Scribd page for a more in-depth view of the real estate market in Sonoma County. And feel free to call or email me if you you’d like to discuss Sonoma County country property!
Here are the latest charts for residential real estate market statistics in Sonoma County. They represent market data from the BAREIS Multiple Listing Service as displayed by Clarus MarketMetrics. The continuing big story is the 25% rise in the median home price versus October of 2012. This is a direct result of actual appreciation in home values as well as an increase in the number of higher priced homes being sold.
It does not mean that every home has appreciated 25% in value–just that the overall mix of homes sold lands at that higher value. At the lower (sub $500,000 ) price ranges, in some cases appreciation might have been as high at 28%, whereas at the upper end the appreciation is more modest, but the rate of sales has increased greatly.
I have attended a few economic forecast meetings this fall and the “experts” think we will see more modest appreciation in 2014, more in the neighborhood of 6%. This probably makes some sense as the overall mix of types of homes may have stabilized so there will be less of a bump from that change. Although last year I believe the same experts predicted 5-8% appreciation for 2013 so who knows?
Bottom line if you have questions about your specific situation, whether buying, or selling, or just sitting pat but curiuos, give me a call or pop me an email and I will be happy to research it for you!
I figured that headline might grab your attention whether you are a Sonoma County home buyer (feeling panic!) or a Sonoma County home seller (feeling excitement!)
You can click through the link below to access the full Sonoma County Home Sales Report as of June 1, 2013. We look at sales statistics for Sonoma County as a whole because the sample sizes for the smaller towns such as Sebastopol, Healdsburg, Sonoma and Petaluma are so small as to be somewhat misleading. The broad brush numbers are interesting and helpful in terms of assessing overall trends, but each location and property type is unique, so your particular results may vary.
So what does this mean to you if you are a buyer?
Home Sellers in Sonoma County are firmly in the driver’s seat–if you are a buyer you are looking at visibly rising sales prices for almost everything priced under $600,000 or $700,000. At the higher price ranges, over $900K or a million, homes are selling extremely rapidly in many cases, often with multiple offers. You really need to team up with a good agent to succeed in this market, be fully pre-approved with a good lender, or have proof of funds if you are a cash buyer. You have to be realistic about what you are willing to spend and perhaps narrow your search criteria to something $50,000 or more under what you ultimately want to spend. It is not uncommon for homes to sell $50 to $100 thousand OVER asking, so adjust your search criteria accordingly. At the million plus price ranges the overbid can be more. A $1.2 million dollar property on West Dry Creek in Healdsburg came on the market and received 4 offers within the offer period and sold well over asking. The home was in a pretty setting with a pool but dated with lovely gardens.
What does this mean to you if you are a Sonoma County Home Seller?
It is possible your home may be worth more than you think. Hurray! Maybe you have more equity than you think. Maybe you have a reason to move–job change, downsizing, new baby on the way. This could be a great time for you to sell. It DOESN”T mean you can overprice your home. It will sell eventually and possibly for less, meanwhile you’ll have people traipsing through your house for a protrated period.
The best advice I can give you is to price it at the low end of what you think it is worth and let the market rise to what the actual value is AT THIS TIME. Typically with my listings we can take a couple of months or more to get the property in shape, get professional photos and create the right message for YOUR property. The prep time will probably exceed the actual market time these days. Please call or email me if you would like a free analysis of your home’s worth! Cleaning, painting, staging and prep work will pay off. Make sure you get a realtor’s advice before spending money or time on preparations. We can help you to prioritize.
Meanwhile, I made some notes on the Scribd.com document below. Take a look and let me know what you think. At my Scribd page I have market reports going back several years. Take a look back in time, and you will see the housing downturn in the rear view mirror.
Every six months the Sonoma County Economic Development Board releases the results of it’s survey of local business leaders. This winter, confidence is at a six year high–nearly making it all the way back from the very low confidence expressed (not surprisingly) in the winter of 2008. The confidence appears to be strongest in the technology sector, and that probably mirrors the strong tech economy throughout the San Francisco Bay Area. Sonoma County and Bay Area business confidence are outpacing the rest of the US. And guess what, so is our real estate market!
Another marker of business optimism is the Economic Development Board’s Purchasing Trends Index which was 70 this winter
making this the second year that Sonoma County has scored higher than the United States Index since 2007. This indicates that business feel less economically challenged operating in Sonoma County than in the US as a whole. Any score above 50 indicates that Sonoma County’s economy is expanding.
Here is a link to the Full Report, which breaks out the numbers by industry. Overall the business outlook in the county is much stronger coming out of this recession compared to the rest of the US than it was going in to the recession. In the past Sonoma County was seen as a less favorable business environment but the cost of doing business here has declined and business growth is looking favorable for 2013. This can only bode well for our real estate market. Now we just need more inventory of homes to sell!
Each month I pull the Home Sale Statistics for Sonoma County. Each report has a dozen or so graphs and charts showing various aspects of our local real estate market. As I review them, I try to think of the one slide that says it all for that month. This month, it is the above chart showing the number of listings available throughout our county. Normally I show median price, months of inventory or active vs sold listings, but this month I thought I would cut right to the chase. We need more listings! Listings are typically low in January and February as home sellers and buyers haven’t geared up for the spring and summer selling season. This year however buyers did not get the memo to take the holidays off! Most of the Bay Area agents I regularly talk to agree that this year we barely took a breath over the holidays and based upon January, 2013 looks to be a very strong year for our real estate market, one that continues to heal. Prices and values are rising. There are fewer and fewer distressed properties and rising home values are lifting more homeowners every month in to an equity position rather than an underwater position. This is all good news! But now potential sellers need to get the memo. Take a look at the graph above. In 2011 on January 31 there were 2205 homes for sale in Sonoma County. This there there were only 1039 available, a 53% decline. That represented declines in both bank-involved sales AND equity sales. When I look at our Multiple Listings Service on February 1, of those 1,039 homes for sale, only 592 were actually Active. The rest had already accepted offers and were either Contingent (working through loan, inspection and other contingencies) or Pending (waiting to fund and close.) So the actual number of homes available is much less than it appears.
What does this mean? Home values are rising rather steadily, with the largest rises coming at the lower end of the market. I believe that sellers are starting to get the word, and we should see more inventory coming on the market at all price ranges in the coming months. If you were considering making a move, please call or email me and i can help you to understand your options and make a plan!
Technology, led by the many medical device manufacturers in Sonoma County, wine and tourism (the wine country part) are strengthening and are expected to lead Sonoma County to grow faster than the state and national averages in the second part of 2013. These are all encouraging signs for a real estate market that continues to strengthen, and where values are at long last rising. Now all we need are more homes listed for sale! Now is not too soon to begin planning to sell or buy in 2013. Please email or call me with your questions, after New Year’s Day. We are taking a short break now and look forward to working with you in 2013. Happy New Year!
And take a peak at the report below, it has some interesting graphs and analytics. It likes back to my document collection at Scribd.com, where I have also posted the latest home sales statistics for the Sonoma County market through November 2012.
The latest Sonoma County home sales figures through August 2012 show more of the same–increased rate of sales, a higher median price due to the addition of more expensive sales and more non-distressed (equity sales) in to the mix as well as significantly fewer listings than a year ago. The result? Homes that sold in over a hundred days a year ago are now selling in 54 days! Given that more homes also went in to contract in August than any month in the preceding THREE YEARS (!), it seems likely that the decline in inventory and increase in sales are trends that will continue for at least the next several months. The upcoming presidential election does not seem to be factoring in to most of my clients’ thinking here in Northern California.
Here is the full set of reports. Please email or call if you have any questions about this data or real estate in Sonoma County. The link will take you to a PDF of the full document at my Scribd page. There you can see all the of the reports I have done in recent years.
Home sales in July picked up speed compared to June and newly pending sales accelerated at an even faster rate, while inventory continues to decline and properties are selling in 62 days versus over 100 days a year ago. No new trends here, just continuation of the patterns we have been seeing all year. When inventory declines as sales increase, that means prices will rise. Bank owned inventory is declining but so is so-called “regular” inventory. There are fewer than two months of inventory available at the current sales pace, a strong seller’s market. That doesn’t mean sellers can overprice their homes. Overpriced homes still sit on the market while well-priced homes in good condition are selling with multiple offers at nearly every price point.
Appraisals can be a challenge in this hot market. We are seeing many instances where homes are selling for higher prices than indicated by recent comparable sales. As a buyer you may need to bring more cash to closing if that is the case, as your loan may not be approved otherwise. This is often a “challenge” we see in a market in transition.
If you are a buyer, you must be pre-approved with a reputable lender in order to be competitive and you must make sure that your agent knows how to give your offer the best shot at success in this competitive environment. It makes a difference.
If you are a seller sitting on the sidelines, it may be time to jump off. Call or email me to get a sense of what your home is worth and what you need to do to get it ready to market. If you are one of the approximately 30% of homeowners whose loan is underwater–that is, that you owe more than your home is worth–and you still want to sell, you may be pleasantly surprised to know that short sales are not as nightmarish as they used to be and can often be successfully completed in a reasonable amount of time. Contact me for details.
The number of homes for sale in Sonoma County is the fewest in many decades, according to a panel of real estate appraisers who recently presented their thoughts at the North Bay Association of Realtors’ weekly breakfast meeting in Santa Rosa. At the end of May of the 1900 homes technically available on our MLS, over 1,000 were already in contract, leaving only 900 homes available. This was roughly a forty percent drop from last May.
Inventory is declining due to a steady increase in new and pending sales, documented here. Interest rates are ridiculously low and buyers at all price ranges conitnue to leap off the sidelines. Appraisals are often a challenge now as the market is moving too fast and overbids in pending sales are not yet reflected as SOLD data, creating large challenges for the 70% of buyers who are applying for home mortgages today.
All signs point to gradually increasing home vales. Decreasing supply and increasing demand.
Part of this may be attributed to the “Facebook” effect, much touted for months even before Facebook’s beleaguered IPO earlier this spring. The IPO and generally strong tech economy are lifting the Silicon Valley and San Francisco housing markets to red hot levels.
I was in San Francisco this morning for a seminar on real estate legal topics and heard some interesting stories that are coming out of this frenzied market.
Many properties, even in the six to twelve MILLION dollar range are receiving multiple cash offers.
What happens when some buyers lose out–they get creative. It is increasingly common for losing Buyers to offer cash incentives to the buyers in first position (the winning buyer) so that they will assign their rights to buy the home to the frustrated loser. How can this happen?
Most standard real estate contracts are assignable, unless specifically amended. In one case winning buyer accepted $100,000 from a losing buyer to assign their right to purchase a home to the second buyer. Can you imagine how the seller feels seeing that $100,000 go to some one else?
Needless to say this creates some interesting challenges for sellers and their agents to be aware of–that is why the good brokerages such as Wine Country Group, my firm, offer continuing legal education to their agents.
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