Home sellers remained in the driver’s seat of the Sonoma County real estate market in 2016.
Looking ahead, agents and brokers keep wondering what it will take to get more of them to put their houses on the market in 2017.
A decreasing number of homes for sale last year resulted in higher prices and slightly lower sales, according to The Press Democrat’s month-to-month housing report, compiled by Pacific Union International senior vice president Rick Laws.
As home values kept rising, five of 15 communities tracked by the Multiple Listing Service in the county set new records last year for annual median prices, surpassing old peaks reached in 2005 in the midst of a national real estate bubble.
Four of the five communities have the highest annual median prices in the county: Healdsburg, Sebastopol, Sonoma and west Petaluma. The fifth is the Oakmont senior community in east Santa Rosa.
In 2016, buyers purchased 4,663 single-family homes in the county, a decline of nearly 4 percent from a year earlier. Of that number, just 304 sales were completed in December, the lowest volume for the month since 2007, a time when housing prices were in free fall.
Despite the decline in sales, the total value of all houses and condominiums sold in the county rose last year to $3.56 billion. That was an increase of 6 percent over 2015.
The total dollar volume increased because of rising prices. In 2016, the annual median price for single-family homes rose more than 9 percent from a year earlier to $580,000.
Brokers attributed both the county’s lower number of sales and higher prices to the lack of homes on the market. They maintain that the market has plenty of buyers.
“The people are there,” said Grace Lucero, director of investment sales for Vanguard Properties in Healdsburg. “There’s just no inventory.”
The data support that view. Sellers last year placed 5,425 single-family homes on the market as new listings, a decline of 7 percent and the lowest number since Laws began tracking listings in 2009.
In contrast, in 2011 at the bottom of the market, sellers listed 6,700 such homes. The difference is that half the single-family homes sold that year were foreclosures or short sales, the latter being properties sold for less than the amount owed on the mortgage.
In contrast, financially distressed properties made up just 4 percent of last year’s single-family sales.
That there are fewer listings helps explain why the county ended the year with a supply of available homes that would last only 1.6 months at the current pace of sales. The smaller inventory made it difficult last year for buyers to find acceptable homes and to make winning offers for properties, brokers said.
“We’ve stayed in a strong seller’s market,” said Gerrett Snedaker, a partner in Better Homes and Gardens/Wine Country Group, based in Sonoma.
Even so, many prospective sellers seemed reluctant to list their homes for sale. The reason, brokers said, is that in a market with limited selections, those homeowners likely doubted they could can find a suitable replacement property.
The county real estate market has seen five straight years of significant price gains following an unprecedented housing crash.