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March median home prices

1992: $191,000

1997: $192,750

2002: $351,000

2007: $565,000

2012: $319,000

2017: $639,000

Source: Pacific Union, Press Democrat monthly housing reports


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.

March median home prices

1992: $191,000

1997: $192,750

2002: $351,000

2007: $565,000

2012: $319,000

2017: $639,000

Source: Pacific Union, Press Democrat monthly housing reports

That amounts to less than two months worth of total inventory at the current sales pace. For homes priced under $600,000, the available listings represented less than one month’s supply.

“I’m not sure I’ve seen a tougher market for buyers,” said Brian Connell, managing broker of the Santa Rosa Mission office of Coldwell Banker. Perhaps home seekers will find a measure of relief from an increase in new listings this month, he said.

The county’s condominium market also is seeing a jump in prices as those unable to purchase houses have turned to units in multi-family developments, brokers said.

The median condo sales price in March rose to $350,000, an increase of nearly 8 percent from a year earlier. However, condo prices remain about 11 percent below the record of $390,000 set in October 2005.

Over the last five years, the rising prices have steadily reduced the number of families who have the wherewithal to buy property here.

Only 26 percent of county households could afford the median-priced home in the fourth quarter of 2016, according to the California Association of Realtors. Doing so would have required an annual income of $116,100 and a monthly payment, including taxes and insurance, of $2,900 for a home priced at $589,000.

In contrast, 58 percent of U.S. households could afford the nation’s median-priced home of $235,000. A purchase would require an annual income of $46,320 and a monthly payment of $1,160.

While by one measure local home prices are once more in record territory, the current housing market is not experiencing a bubble, said Madeline Schnapp, director of economic research at PropertyRadar, a Truckee company that tracks real estate data.

“Supply and demand is just way out of whack,” she said.

Regulatory hurdles make it difficult and expensive to build new housing here, holding down supply, she said. And the Bay Area is benefiting from plentiful jobs that allow buyers to take advantage of low-down-payment loans and historically lower interest rates.

Schnapp agreed with local brokers that higher mortgage interest rates eventually could lead to a slowdown in rising home prices. But the Federal Reserve’s expected rate increases later this year may have a less immediate effect on home lending than some possible geopolitical event that rattles the finance markets, she said.

Schnapp, who lives in Sonoma County, said she thought $525,000 “was pretty high” for a median price here, let alone the current record price. But home sale prices in other parts of the Bay Area seem even more striking, such as a typical two-bedroom home on a busy street in San Mateo County fetching $1.3 million.

The county’s high prices likely will cause many younger families to look elsewhere for homes, she said, and also prompt older homeowners to “cash out” and downsize to less pricey locales.

“At some point,” Schnapp said, “people begin to leave.”

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