Sonoma County home sales reflect low inventory, rising median price

Fewer Sonoma County property owners have put their houses on the market this year, which helps explain why the median sales price rose last month to its highest level in nearly nine years.

The county’s median price for a single-family home climbed 5 percent in March from February to $570,490, according to The Press Democrat’s monthly housing report, compiled by Pacific Union International senior vice president Rick Laws.

The median price increased nearly 12 percent from a year ago and now stands at its highest level since July 2007, when it was $575,000.

“Things are very competitive, and things are very expensive,” said Tesa Walters, an agent with Pacific Union/Christie’s International in Santa Rosa.

The rise in the median price is due in part to tight inventory and continued demand from buyers. But it also is partly due to a drop in the number of lower-priced starter homes coming to market this year.

New listings for the first quarter of 2016 fell to the lowest level in the seven years that Laws has been reporting such data. But the drop was concentrated among homes priced under $400,000, where new listings declined 58 percent compared to the same period in 2015.

The market is “just way out of whack” when it comes to inventory, especially for starter homes, said Bill Facendini, president and broker of Terra Firma Global Partners in Santa Rosa. “There’s not enough new units coming on.”

Two Terra Firma agents recently had open houses for homes priced under $400,000, Facendini said. Each property had more than 100 visitors in a single day, an indication of how many buyers are looking for such homes.

The median price now stands within 8 percent of its August 2015 peak of $619,000. The county hit that record in the midst of a national housing bubble.

But the market eventually crashed, and the median priced was cut in half. It reached a bottom of $305,000 in February 2009.

Laws on Tuesday noted that Pacific Union and housing economist John Burns this winter predicted that county home values would rise just 4 percent for all of 2016. “Holy smokes, we’re seeing that already,” Laws said.

Brokers and agents said this year’s lack of inventory continues to favor sellers and is prompting plenty of competition.

It’s common to see five to seven buyers make offers on the same home, especially those priced around $500,000 to $600,000 said Steve Dick, manager of Better Homes Realty in Santa Rosa.

Buyers last month purchased 360 single-family homes, an 8 percent increase from a year ago. However, sales to date for 2016 remain the second-lowest in eight years.

Moreover, the data suggest a tale of two markets.

In the first quarter, the number of houses sold at or above $500,000 increased 45 percent from a year earlier. But for the same period, buyers this year purchased just half the number of homes for the segment under $400,000, compared to 2015.

March ended with fewer than 590 single-family homes available for sale, roughly a 1.6-month supply of inventory at the current pace of sales.

The lack of starter homes in and around Santa Rosa will cause some first-time buyers to look west to the Russian River, said Lori Sacco, broker manager in the Sebastopol office of Vanguard Properties.

“People are going to push out that direction again,” she said. “Guerneville was hot last year. And I think it will continue to be.”

The number of new listings typically increases through spring and early summer. Brokers predicted that sales also will rise, but they generally expressed skepticism that the totals will be much different from last year.

“Is it going to be a big change?” asked Dick of Better Homes. “I don’t think so.”

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