Sonoma County’s housing market wrapped up the first half of 2014 by once more posting both a drop in sales and a double-digit jump in prices.
Buyers in June purchased 472 single-family homes, according to The Press Democrat’s monthly housing report compiled by Pacific Union International Vice President Rick Laws.
Home sales declined just 1 percent in June, compared to a year ago. But for the first half of the year, they fell 10.9 percent from a year earlier and were the lowest in three years.
“We’re not selling that many houses,” said Mike Kelly, an agent with Keller Williams in Santa Rosa.
Part of the reason is fewer homes are available for sale. And after nearly two years of rising prices, he said, fewer potential buyers can afford a house in Sonoma County.
Even so, demand remained healthy enough to push prices higher.
The median price for a single-family home rose in June to $498,500, a level last reached in January 2008 and an increase of 14.6 percent from a year earlier.
“We are definitely still seeing strong appreciation,” Laws said. He cited low interest rates and population growth that continues to outpace construction of new housing units.
It may be small comfort to buyers, but in June 2013 the median price was rising at an even faster pace, climbing 25 percent from a year earlier to $435,000.
Starting about 14 years ago, county home prices were on a steep rise, reaching a record high of $619,000 in August 2005. But prices tumbled during a historic housing crash, hitting a low of $305,000 in February 2009. More than 15,000 county homeowners lost their properties over the last seven years in foreclosures or short sales, the latter a transaction where the price is less than the amount owed on the mortgage.
In early 2009, roughly three out of every four single-family home sales involved such economically distressed properties. That rate has dropped substantially, especially during the last 18 months. By June, only 6 percent of sales involved foreclosures or short sales.
The month ended with 920 homes on the market, equal to roughly a two-month supply of properties at the current sales pace. Such a low inventory is widely regarded as a sign of a seller’s market.
With fewer homes for sale, multiple buyers have wound up looking at the same property. Kelly said one older couple recently ended up making an offer on the same Santa Rosa home that their adult son was pursuing.
“Neither of them got it,” he said.
Many buyers have found themselves looking farther afield or agreeing to accept features they originally had considered less desirable.
“They had to broaden their search,” said Rebecca Celli, an agent with Coldwell Banker in Petaluma. Celli, the past president of the North Bay Association of Realtors, said one older couple originally wanted to avoid two-story homes, but eventually told her they would consider such properties if at least one bedroom was on the ground floor.
While the inventory of distressed properties has plummeted, sales have increased in more affluent neighborhoods. In the first half of 2012, buyers purchased just 568 homes priced at or above $500,000. This year, that number jumped to 1,012 in the same period.