Home prices continue ascent in Sonoma County

Sonoma County home prices keep rising, but plenty of sellers nonetheless are finding they can’t get as much money as they’d like for their properties.

The county’s median price for a single-family home reached $547,200 in May, according to The Press Democrat’s monthly housing report compiled by Pacific Union International Vice President Rick Laws. The median increased 2 percent from April and 12 percent from a year earlier.

Despite such increases, brokers and agents said a significant number of sellers are finding it necessary to reduce the amount of their initial asking prices.

Multiple listing data suggest that better than 1 in 5 currently available properties have undergone price reductions, said Mike Kelly, an agent with Keller Williams in Santa Rosa. The available data doesn’t allow for comparing with past years.

The price reductions don’t mean a drop in the actual value of the homes, said Tom Kemper, manager of the Coldwell Banker office on Bicentennial Avenue in Santa Rosa. Instead, these are cases in which homeowners set the initial prices too high, only to have buyers balk at paying so much money.

“As prices go up,” he said, “you get fewer and fewer people who say, ‘That’s a good deal.’?”

Even as home prices keep rising, sales have stayed flat this year. Buyers last month purchased 448 single-family homes, essentially unchanged from a year earlier. The year-to-date total of 1,692 homes sold also is within 1 percent of the total from the same period of 2014.

The median price has risen to within 12 percent of its record high of $619,000 set in August 2005. In so doing, it has climbed 79 percent from its low point of $305,000 in February 2009, the bottom of a historic housing market crash.

For various reasons, agents and brokers said, more owners this spring have dropped their initial asking prices. Some suggested the market isn’t as frantic this year, while others speculated that listings are so hard to come by these days that agents seem more willing to let sellers set unreasonably high initial prices in order to get their business.

“You’re having price reductions because they priced them too high, and they can’t sell them because they think the market’s so hot they can price them for anything and people will jump all over ’em,” Kelly said.

Potential buyers also seemed to be exhibiting “price resistance,” Laws said.

“No longer are buyers willing to pay whatever it takes to secure the property,” he said.

The county housing market this spring has been hampered by a shrinking supply of available homes, Laws said.

“We’re definitely below last year in terms of inventory, which is driving up prices,” he said.

May ended with a preliminary count of 780 homes for sale, a 20 percent decrease from a year ago. That amounts to less than a two-month supply at the current sales pace.

And the makeup of that inventory is skewed toward high-end homes that are out of reach for the typical buyer, Kelly said.

One out of 3 county homes available for sale at the end of May was priced at or above $1 million. Such homes accounted for only 1 in 9 sales last month. The median price of the available inventory in May was $725,000, considerably higher than the median for sold properties.

Kelly expressed concern that new listings of homes peaked in March this year. For the past four years, May was the month with the biggest number of new listings.

“We’re not seeing a big spring surge” in listings and sales, he said.

Laws acknowledged the market got off to a slow start early this year, but he took some encouragement from the fact that total sales remain in step with last year’s. Demand remains strong enough that whenever more listings come to market, the number of deals between buyers and sellers rises, too.

Looking ahead, a significant number of homeowners are making preparations to put their homes on the market in the coming months, said Lori Sacco, manager of Vanguard Properties in Sebastopol. Her agents have stayed busy and should continue to do so through summer.

“I see the rest of the year kind of holding steady,” Sacco said.

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