Median Home Price Rises in Sonoma County
A few days ago I wrote in a post:
The sheer activity level, the vast number of first time buyers and investor clients looking for rental property, and the declining number of new listings have all been detailed here over the previous months. In December, new sales exceeded new listings for the first time in many months, and, beginning in February it seems to us that the bottom was reached and had passed some entry level buyers by.
A few minutes ago I received the following snapshot of the Sonoma County Real Estate Market closed sales figures from March 2008 through March 2009, thanks to my broker, Rick Laws of Coldwell Banker, who compiles our market statistics and shares them generously, with not only me and my colleagues, but the Press Democrat newspaper.
Obviously one of the take aways from this graph, year over year, is the 27% drop in median price for the county. But the median price rose from its low in February about $10,000 with a high rate of closed sales and a good statistical base. Prices on the low end seem to have stabilized and maybe bounced upwards a few percent. This is as welcome as the signs of spring!
The Credit Crisis Simplified
Kudos to blog buddy Gretchen Merrick, writing from the South Bay, for calling my attention to this wonderful animation which explains the origins of the current credit crisis in clear and simple fashion. Her post contains a link to an interview on Terry Gross’s Fresh Air Show on National Public Radio, which offers more detail. The Credit Crisis Simplified | South County Real Estate Today
I thought I would offer the video here. I love this form of visual communication when done well!
The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.
Have we hit bottom in the Sonoma County real estate market cycle?
Actually the only way you know is when it has passed by.
A few weeks ago an agent friend and I were visiting as I fed the horses one early spring evening. She was telling me of the difficulties she was having successfully securing a home for first time buyers. This a great agent with many years of experience who was working with entry level low income buyers in Sonoma County. They were looking for a home priced under $200,000 in the Santa Rosa city limits. They were pre-approved for FHA financing with the reputable lender who had referred them to my client. They are eligible for a $10,000 down payment assistance from the city of Santa Rosa which will subsidize their down payment. Their income and credit qualified them for an FHA (Federal Housing Administration) loan. Although they qualify for the federal government first time buyer $8,000 tax credit, that cash won’t reach their pockets until after the sale has closed.
This couple was competing in many multiple offer situations with all cash investor buyers or other first time buyers such as themselves. Many properties in their price range were in such poor condition that they would not meet the strict FHA property condition guidelines, and the repairs needed would have put them beyond the couple’s limited budget. I don’t know how many offers they wrote but they were not having luck.
As my friend detailed the many days and hours she spent with this couple, she said it was seeming increasingly unlikely that they would make it into the market. I paused as I asked her, “Do you think we have hit the bottom here in Sonoma County?”. She said yes–good properties are selling extremely fast and sometimes at over asking price. I had to agree. What had seemed a consistently active but still laid back market this winter was falling into high gear as the days got longer. As some of my buyer clients and I surmised in January and February, we felt that things would be much more competitive as spring arrived, and that seems to be true. In fact, the southern part of Sonoma County, in Petaluma was already scorching hot at Christmas and New Year’s time. And that same scorch-ability (sp?) seemed to be tracking north along the 101 corridor.
The sheer activity level, the vast number of first time buyers and investor clients looking for rental property, and the declining number of new listings have all been detailed here over the previous months. In December, new sales exceeded new listings for the first time in many months, and, beginning in February it seems to us that the bottom was reached and had passed some entry level buyers by.
That said, with only 3-5 homes selling over $1 Million dollars in Sonoma County between December and February, and the mid-ranges still sluggish and all over the map, it seems that properties priced above $350,000 (+-) are still seeking equilibrium. It is a real challenge in these price ranges in communities from Healdsburg to Santa Rosa to Sebastopol to know exactly where new listings this spring and summer should be priced to attract a buyer sooner than later. Clearly there have been a number of sales in all three communities this early spring that give some hope at these price points that buyers and sellers will come to terms. It seems that the properties that are successfully selling in the mid-ranges are price 10 to 20% or so below the prices of the last couple of years. Only time will tell this spring what the market has in store for mid-tier properties and upper-end properties. But the fact that the bottom seems to have been touched on the low end, bodes well for eventual market stability.
Been Down So Long It Looks Like Up To Me
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.
Sonoma County Real Estate Market sizzling hot up to $1 Million
But not over a million. That part of our market is very slow. But signs are very encouraging for a more balanced market in 2009 at all price points under a million. The experience of most Sonoma County realtors I know is that buyers are out if force for January, following a very busy holiday season. The big difference is that we are finally seeing sales movement at prices between $400,000 and $1 million, as buyers in those price ranges seem to be stepping off the fence. Both single family homes and condos are selling at a rapid clip. More details to come but here is a quick snapshot for single family dwellings in all price ranges through January 30, 2009.
How far do I have to walk home from wine-tasting? or Cyrus?
You can take advantage of Cyrus’ two Michelin stars and have less than a 1/2 mile walk home.
…..Or Starbucks?….one half of a mile, the Tuesday night Farmers Market? …1/2 mile. The Raven Theater ?….only .32 of a mile.
These are some of the nifty facts you learn, for example, about my classic Healdsburg bungalow listing at 414 Piper Street when you visit Walkscore.com, one of the coolest real estate search tools I found in 2008.
Because their WordPress support for this template is lacking at the moment, you will need to plug in 414 Piper Street, Healdsburg to the widget in the upper right hand corner of home page of Wine Country and Horses to generate a map, walkscore and a true view of an addresses’ nearby amenities. I also use Walkscore to convey to country property clients how near (or far) shopping, schools and restarants are. Generally in Sonoma County wine country, people like to know that their lovely country home is still pretty close in to conveniences.
It’s another mashup–combining mapping technology with local directory services–the purpose?
To promote walking, health and help people to reduce their carbon footprint by choosing homes with high walkscores! I think you’d have to live in Manhattan, downtown Seattle, Boston’s Back Bay or Pacific Heightsi in San Francisco to have a higher walkscore.
The company is expanding it’s services to realtors by making a programming interface (API) available for custom use of the Walkscore engine. What a great tool to add to your real estate search portfolio (or if you are marketing a property,to add dimension to your listing promotion.)
Walkscore generates a map or street view of your targeted home and shows you the distance to all the local restaurants, shops, schools and other amenities. It can help you get to know a neighborhood you might be considering. I can’t imagine anyone looking for property who wouldn’t want to know their Walkscore. (and no, I don’t work for the company! )
Wine Country and Ducks Redux, or just how early is spring this year?
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.
Sonoma County Home Sales Surge 24.5% As Prices Roll Back to 2002 Levels
Many times I have shared the latest Sonoma County real estate sales statistics for residential properties. These are compiled on a monthly basis by my broker at Coldwell Banker, Rick Laws, based on actual sales data for the entire county as reported on the Bay Area Real Estate Information Services, our multiple listings service. The reporting software is Brokermetrics, from Terradatum.  Fellow agent, Craig Curreri, has taken it upon himself to go back to 1990 and summarize this data so that we have a nineteen year perspective on our bit of Northern California wine country real estate values.  
Thanks to Craig for the headline above. There is no doubt that this is a very difficult time in real estate for many people. It helps to put events of the last couple of years into perspective. Thanks Craig and Rick!
Mid-Price Range Real Estate Trends in Sonoma County for 2008
My last post this week detailed real estate supply, demand and price trends for Sonoma County real estate. The story of last year was bargain basement pricing by the banks looking to clear their inventory of foreclosed homes. County-wide the median price dropped 30% year over year through December 2008. The bulk of the sales action was in the sub-$500,000 price range and really lower than that. It is possible to find single family homes under $300,000 and even under $200,000 in some cases. With conforming loan rates ducking under 5% for thirty year fixed rate loans, first time buyers and investors are snatching up properties at a record pace. Condominium sales are just as hot.
Meanwhile, let’s take a look at homes in the mid-range tier of pricing, between $500,000 and $1 million dollars. In this range currently you will start to see larger homes, possibly with acreage in communities all over Sonoma County such as Santa Rosa, Sonoma, Glen Ellen, Healdsburg, Sebastopol and Petaluma.  The bulk of the lower priced properties are concentrated along the 101 corridor in Santa Rosa (primarily west of 101) , east Petaluma, Rohnert Park/Cotati and Windsor. It is not safe to over generalize about communities if you are looking for property however as we have a wide variation of homes and locales.
Here is a view of supply and demand for Sonoma County homes priced between $500,000 and $1 million dollars. The first chart shows the change, or lack of change, in median price over the course of 2008. Median price rose a modest 2.5% in this price range.
The reason prices did not drop drastically in this price range was that the supply of new homes dwindled at the same rate as the number of sales, as sellers who did not need to sell retreated. The rate of sales and new listings were cut in half year over year.
There was also a recalibration of pricing above a million and below $500K as properties sought new levels. Clearly there has been a less dramatic softening in prices but the median was left essentially unchanged. There was a slight increase in sales at the end of the year and a leveling of new listings coming on the market. What do you think this information means for the spring market?
2008 Sonoma County Real Estate: Three Quick Sales Trends
These three graphs tell the quick story of pricing, supply and demand trends for housing in Sonoma County from December 2007 through 2008. But the real story for your home depends on the price range for your house and the part of the county in which you live, or seek to live. You cannot automatically say that every home in the country dropped 30%. The price dropped most steeply in those communities with high rates of distressed housing: West Santa Rosa, East Petaluma, Windsor and Rohnert Park/Cotati.
But, on average, and in summary:
The median price dropped 30% year over year.
The number of newly ratified sales contracts grew steadily all year and lead to a 184% increase year over year.
Months supply of inventory dropped dramatically (73%) and steadily all year, exceeding the drop in prices.Â
From a very strong buyers market in December ’07, with over 14 months supply of homes at last December’s sales rate, this December saw only 3.7 months supply. Six months is considered a balanced market. Anything under is a seller’s market–in this case the banks who own nearly half the properties sold.
