Home sales show signs of life in Sonoma County

Sonoma County home sales remain at their lowest level in seven years, but the housing market began to show signs of life last month with a marked increase in new home listings and in signed contracts between buyers and sellers.

Buyers purchased 328 single-family homes in March, according to The Press Democrat’s monthly housing report compiled by Pacific Union International Vice President Rick Laws. That was the lowest number for the month since 256 houses were purchased in March 2008.

But also last month, 613 properties entered the market as new listings, the most for March in five years. And buyers and sellers signed contracts to buy 495 properties, the most for the month in seven years. While some of those agreements typically fall through, most are expected to become final in April and May.

For the year’s first quarter, home purchases were lackluster, Laws acknowledged, but “the only reason the sales were not so hot was there was no inventory.” He maintained that last month’s jump in signed contracts showed strong demand by buyers.

Indeed, other real estate brokers said their problem isn’t subdued sales but having too few properties available for purchase. The result is that many listings are drawing bids from multiple buyers.

“There’s a lot of frustrated buyers and a lot of frustrated agents out there,” said Stephen Liebling, manager of the Coldwell Banker office in Sebastopol. For every buyer who gets a home, he said, 10 may go away empty-handed.

The median single-family sales price for the county ended March at $511,000, an increase of about 4 percent from both February and from a year earlier.

The median price hit a record $619,000 in August 2005. But a few years later, prices crashed amid a historic housing crisis. The median price began a sharp decline in 2007 and fell to a low of $305,000 in February 2009.

Home sales typically increase markedly during the spring and summer months. But each year has its own dynamics. And brokers and agents now are wondering whether the rest of 2015 will feature relatively slower sales, as occurred over the winter, or relatively heightened activity, as happened in March.

The inventory of available homes has fallen partly because of a sharp decline in the number of foreclosures and short sales on the market. But agents maintain that the lack of inventory is itself keeping many sellers from listing their properties. Those potential sellers reportedly don’t like their prospects for finding a suitable replacement home. A common phrase this year is sellers don’t want to become buyers.

Demand for the available properties remains strong partly because of a lack of new home construction. Last year, local governments around the county issued building permits for just 251 single-family homes, the lowest level in at least 45 years.

Despite last month’s jump in new listings, total inventory remains tight in the county. March ended with about 660 homes still available for sale, essentially a two-month supply at the current pace of sales. That typically is considered a sign of a sellers’ market.

Bill Facendini, president and broker for Terra Firma Global Partners in Santa Rosa, said the new listings in March didn’t have much effect on home values in three of the county’s hotter markets: Healdsburg, Sebastopol and west Petaluma.

“The prices they are achieving are way above where they should be,” he said.

Liebling noted that typical tract homes in Sebastopol are selling for $750,000. “It’s really crazy,” he said.

To get an edge, some buyers are seeking out those getting ready to sell their homes. They are finding such sellers with the help of friends and neighbors, aided at times by social media sites like Facebook, Liebling said. The aim is to purchase the home before an official listing date, thus avoiding a bidding war.

“The buyers are doing whatever they can to make their offer come to the front of the class,” Liebling said. He knows of cash buyers who have sweetened the deal by agreeing to rent back the properties for free to sellers for four to six months.

Madeline Schnapp, director of economic research for PropertyRadar, a Truckee company that tracks foreclosure and property data, said she is still analyzing California data for March. But first-quarter sales appear to have been relatively subdued statewide.

Schnapp, a Sonoma County resident, said she saw firsthand the high property values here when touring a half-dozen homes for sale over the past month.

“I was stunned at the prices, and stunned at what you get for the prices,” she said.

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