Sonoma County home sales, median price fall in April

Home sales remained lackluster in Sonoma County during April as the ongoing inventory shortage left many first-time buyers frustrated.

Buyers purchased 356 single-family homes in April, according to The Press Democrat's monthly housing report compiled by Pacific Union International Vice President Rick Laws.

Sales declined 24 percent from a year earlier and remained below the 10-year average for April of 396 transactions.

The county's median sales price declined nearly 5 percent from March to $468,975. April's median remained nearly 8 percent higher than a year earlier.

For the year, total sales are at their lowest level since 2008, a period of recession and plunging home prices. County home sales have been lower on a year-over-year basis for each of the last 11 months.

Inventory has been scarce for more than a year and is blamed for fewer sales, multiple offers and a number of frustrated buyers.

"It's a seller's best friend and most buyers' nightmare," said Jeremy King, an agent and team member with his mother, Peg King, at Coldwell Banker in Petaluma. "There's nothing to choose from."

April ended with roughly a two-month supply of homes at the current sales pace — widely considered a sellers' market.

Single-family homes have continued to appreciate markedly in Petaluma, said Peg King.

"By and large, there is nothing under $400,000 anymore," she said.

Tim Freeman, manager of Coldwell Banker in Santa Rosa, said some first-time buyers are leaving the market after concluding they can't purchase a home at today's prices. He noted the recent experience of one of his agents.

"She lost four clients within the last month because they all feel they're being priced out," Freeman said.

The county's median price soared to a record high of $619,000 in August 2005, before tumbling to $305,000 in February 2009.

A year ago, prices jumped amid fierce competition for homes. The median sales price climbed to $435,000 in April 2013 from $365,000 that January.

The current bidding isn't as intense as a year ago, said Laws, "but we are definitely getting multiple offers, especially in the lower price range."

For those seeking homes here priced under $400,000, Laws said, "I can understand why buyers get very frustrated."

Sales activity this year has differed markedly by price segments. Year-to-date sales for homes purchased under $400,000 have declined 47 percent from a year earlier, while sales for homes sold above $400,000 have increased 20 percent. Sales above $1 million have jumped 33 percent.

The drop in sales at the bottom of the market is generally attributed to the decline of economically distressed properties. The jump in sales of more-expensive homes is considered due to an improving economy.

At the bottom of the current market cycle, nearly three in four sales involved a foreclosure or short sale. But that rate slowly sank over the last five years, and distressed properties now account for only one in 10 sales.

Despite the challenges, agent Trish McCall of Keller Williams in Santa Rosa gave two reasons for first-time buyers to keep house hunting.

First, she said, by purchasing a home, buyers can lock in their housing expenses, often at nearly the cost of renting. And the county's rental housing market is proving just as tight and competitive as the home sales market.

Second, McCall already is seeing more listings available on agent tours, and she is hearing from more sellers who are preparing to bring their homes to market. She predicted summer will offer an increasing number of homes for sale.

"You'll actually have some selection," McCall said.

At the state level, the California Association of Realtors reported Thursday that April marked the ninth straight month where sales declined on a year-over-year basis. The state's median sales price reached $449,360 in April, an increase of nearly 12 percent from a year earlier.

Looking ahead, association chief economist Leslie Appleton-Young predicts prices likely will rise at a more moderate pace and sales likely will increase in the coming months. But she cautioned that relatively higher prices and interest rates could make homes less affordable.

Home buyers "may no longer have to compete with investors in 2014, but instead they need to worry about increased borrowing costs," she said in a statement.