Sonoma County’s housing market set a record sale price of $639,000 in March, a jump fueled by strong demand and tight inventory.
The new median price is double what it was five years ago.
The county’s median sales price for a single-family home last month was a 14 percent rise from a year earlier, according to The Press Democrat’s monthly housing report, compiled by Pacific Union International senior vice president Rick Laws.
It was the first time in nearly 12 years that the local market set a new high record. The March median price exceeded the former all-time peak of $619,000 reached in August 2005 amid a national housing bubble. Two years later the county’s housing market suffered an unprecedented slide in a national recession, reaching bottom in February 2009 at $305,000.
Prices have climbed sharply from a median of $319,000 in March 2012.
“It’s a little crazy right this minute,” said Craig Curreri, a broker associate with Pacific Union in Santa Rosa.
Buyers continue to find themselves in a sellers market, where multiple offers over the asking price are common for the relatively low number of available homes. This spring many buyers paid “premium prices” over what comparable homes had recently garnered, Curreri said.
When discussing the market with other agents, he said, the topic often turns to, “Can you believe what that house sold for?”
In such an environment, brokers said, the new record price is hardly surprising. Nonetheless, the news elicited concern even within the industry about the way that rising home values will affect younger residents hoping to ever own a home here.
“You priced our kids out of this county,” said Cary Bertolone, an owner of Bertolone Realty in Santa Rosa.
Bertolone acknowledged that each spring he thinks prices will start to level out. “I’ve been wrong three years in a row,” he said.
The former peak price remains higher than the current median when adjusted for inflation. The 2005 amount would equal $772,000 in today’s dollars, according to calculations available from the federal Bureau of Labor Statistics.
Even so, the unadjusted median price over time remains a key marker for the housing market.
Looking back over a quarter century, the county’s median price in March 1992 stood at $191,000. By March 2002 it had climbed to $351,000 and to $565,000 in March 2007, about three months before home values began a prolonged free fall.
This year’s rise in the median price came not only from appreciation but also from a shift in the market caused by a significant jump in luxury home sales. Completed deals on homes selling for $1 million or more increased 41 percent to date this year compared to the same period in 2016. Meanwhile, the number of homes selling for less than $600,000 decreased 24 percent.
In March, county buyers purchased a total of 349 single-family homes, a decline of nearly 7 percent from a year earlier. County home sales have fallen in three of the past four years.
At month’s end, fewer than 570 homes remained for sale, and that inventory was skewed toward the higher end of the market. Only 133 homes were listed for less than $600,000, while 247 homes were listed for $1 million or more.