Sonoma County home prices stayed flat in August

Appreciation in home prices seems to have taken a summer holiday in Sonoma County, as real estate experts watch to see whether stable prices will continue into autumn.

The median sales price of a single-family home ended August at $546,000, according to The Press Democrat’s monthly housing report compiled by Pacific Union International Vice President Rick Laws.

The county’s median price has changed less than 1 percent each month since May, when it was $545,000. In contrast, the median has increased nearly 15 percent from a year ago, when it stood at $475,000.

Doug Solwick, a broker associate with Pacific Union International in Santa Rosa, said he welcomed the respite from rising median prices, which have climbed a total of 65 percent in the past four years.

“That gives some people a little bit of breathing room for the economy to catch up with the housing market,” he said.

Laws acknowledged “there was a little bit of a lull” over the summer in sale prices. But he questioned how long that would continue.

The housing market still features relatively strong demand by buyers and a tight supply of homes available for sale, he said. Also, the median price is likely to rise simply because home sales this year have continued to increase in higher-priced neighborhoods, while deals in more modest areas have been harder to find.

For those hoping prices will stay flat, Laws advised, “I wouldn’t hold my breath.”

The county’s median home price has both soared and plummeted over the past 15 years as the nation’s housing market experienced a historic bubble and crash.

The median price hit a record high of $619,000 in August 2005, only to sink to a low of $305,000 in February 2009.

Between 2007 and 2013, more than 15,000 county homeowners lost their properties to foreclosures and short sales, the latter being a sale for less than the amount of the home’s mortgage.

The number of financially distressed sales has significantly dropped over the past six years. In August, sales of foreclosures and short sales comprised less than 3 out of 100 transactions. In contrast, in February 2009 they made up nearly three out of every four sales.

Similarly, the outlook has much improved in terms of the number of homeowners who still owe more on their mortgages than their homes are worth.

In this year’s second quarter, 4.4 percent of all county homeowners with mortgages were underwater, according to real estate data service CoreLogic. That amounted to about 4,500 property owners.

In comparison, at the end of 2009, about 32 percent of such borrowers - or almost 34,000 homeowners - were in negative equity.

As the housing market has rebounded, the increase in the median price has occurred partly because of home appreciation and partly because of a shift in the types of homes sold.

County homes increased in value an average of 10.9 percent in July from a year earlier, based on sales of the same properties over time, according to CoreLogic. The company also calculated that the average home value here increased 2.2 percent from June to July - a rise incidentally not matched for median prices in the newspaper’s report for the same period.

Besides rising valuations, the median price has risen as sales have increased in the county’s more affluent neighborhoods. To date this year, the number of homes selling for less than $400,000 has declined 38 percent compared to the same period in 2014. In contrast, homes selling for $500,000 or more have increased 24 percent from a year earlier.

In August, county buyers purchased a total of 470 homes, an increase of nearly 7 percent from a year earlier. Total sales to date this year have increase nearly 3 percent from the same period in 2014.

Last month ended with slightly more than 900 homes available for sale, less than a two months supply at the current sales pace. In contrast, experts say a balanced market requires roughly a six-month supply of inventory.

Historically, county homes sales peak each year around June or July. But the market remains active into autumn, with the number of home sales in October often surpassing those in April.

Kathy Torvick, broker/owner of RE/MAX Leading Edge in Oakmont, said multiple buyers continue this month to make offers “on well-priced and nicely presented homes.” However, sellers have met resistance when pricing homes above comparable properties.

“I’m sensing a little bit of pushback from the buyers,” Torvick said.

Shawn Hermosillo, an agent with W Real Estate in Santa Rosa, said recently he has noticed a number of sellers who were forced to post price reductions on their listings.

“They’re starting to make the mistake of outpacing the market,” he said.

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