Sonoma County home sales continue slow pace, crimped by tight supply

Sonoma County’s housing market continues to sputter at its slowest pace in seven years, as real estate agents and brokers wait for more owners to list their homes for sale.

Buyers purchased 241 single-family homes in the county in February, according to The Press Democrat’s monthly housing report compiled by Pacific Union International Vice President Rick Laws. Sales for the first two months totaled 466, the lowest amount since 2008.

“We’re definitely slow out of the gate,” said Laws.

The median sales price rose in February to $492,000, an increase of 9.5 percent from a year earlier.

Housing values soared a decade ago, and the county’s median price hit a record $619,000 in August 2005. But prices plunged a few years later, even as more than 15,000 county homeowners eventually lost their homes in foreclosures or short sales . The median price began a sharp decline in 2007 and fell to a low of $305,000 in February 2009.

Economists have suggested the housing market remains in transition. It has moved beyond the days when investors were snapping up large numbers of economically distressed properties, but it has yet to see sales fueled more by “move-up buyers,” those who sell their existing homes in order to buy higher-priced ones.

Home sales have declined 14 percent over the past two years as the number of distressed properties on the market has dropped dramatically.

In 2012, foreclosures and short sales made up nearly four in 10 sales. By last year they comprised less than one in 10 sales.

As distressed inventory declined, so has the overall number of homes listed for sale. While new listings increased nearly 10 percent in February, compared to a year ago, the total for the first two months of the year still remains at the lowest level since at least 2009, when The Press Democrat housing report began tracking such data.

February ended with roughly a two-month supply of inventory at the current sales pace.

Agents and brokers maintained they have plenty of buyers but not enough homes for sale. The tight market is exacerbated by the sharp downturn in construction of new homes. Last year, housing starts in Sonoma County dropped to a 45-year low, fueling a sharp increase in rents and home prices.

The low inventory is a common theme around the region.

“I’m hearing that from all the other Bay Area markets as well,” said Brian Connell, managing broker for the Coldwell Banker office in east Santa Rosa. “It’s the same story everywhere.”

If a property is priced well and in a good location, brokers expect it will get multiple offers.

“It’s a good time to be a seller,” said Connell, “as good as I’ve seen in many, many years.”

However, many homeowners are staying on the sidelines because they worry they won’t be able to find a new place to live if they sell.

“The hardest part is the sellers don’t want to sell because there’s nothing to buy,” said Pat Provost, one of four owners of Century 21 NorthBay Alliance in Santa Rosa.

Brokers and agents maintained they already are seeing signs of new activity as the market gears up for the spring sales season. Even so, Laws suggested the old rules of supply and demand still apply.

“This has got to drive prices north,” he said. “We’ve still got some price appreciation to go in this.”

You can reach Staff Writer Robert Digitale at 521-5285 or robert.digitale@pressdemocrat.com. On Twitter @rdigit