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Sonoma County housing market off to best start in six years


Sonoma County's residential real estate market chalked up $1.34 billion in sales for the first half of 2013, its best showing in six years.

Buyers wrapped up the first half of 2013 by purchasing 471 single-family homes in June, according to The Press Democrat's monthly housing report compiled by Pacific Union International Vice President Rick Laws.

Sales for the year's first six months totaled 2,425 homes, a decline of 8 percent from a year earlier.

But the total dollar volume still grew due to a mix of rising home values and increased sales in more-affluent neighborhoods. The county median sales price climbed to $439,000 in June, an increase of 3.3 percent from May and a jump of 26.2 percent from a year earlier.

In 2011, county sales of houses and condominiums totaled $956 million for January through June — the lowest amount since home prices tumbled six years ago. Two years later, the first-half total has increased by 39.8 percent.

"It's a comeback year for the real estate industry after a few challenging years," said Brian Connell, a broker/manager for Frank Howard Allen in Santa Rosa.

Brokers and agents said business has dramatically picked up for upper-end properties. For the first six months, sales of homes priced between $800,000 and $2 million increased 42 percent from a year ago.

Among such properties is a 2,200-square-foot home on nearly 3 acres outside Healdsburg that was listed for $1.195 million and is slated to close escrow on Thursday. The home was on the market just 12 days and received multiple offers, said John DeLario, a Coldwell Banker agent in Santa Rosa who represented the sellers with his wife Jeanne.

"I think this is indicative of times changing," Jeanne DeLario said of the home's short time on the market.

The county's real estate market soared in 2005, when buyers purchased $2.14 billion worth of residential real estate in the first half of the year. That August the county's median sales price hit a record $619,000.

But prices tumbled sharply in late 2007 and the median eventually fell to $305,000 at the bottom of the market in February 2009.

Along with rising prices, this year has been marked by tight inventory and a dramatic drop in the sales of economically distressed properties.

June ended with just 820 homes on the market, the lowest number since 2000.

Tim Freeman, manager of Coldwell Banker in Santa Rosa, said inventory has dropped the most in the starter home segment of the market. The number of available homes priced below $400,000 has declined 60 percent from a year ago, he said.

That reduction is largely due to the decline in foreclosures and short sales, the latter being properties that sell for less than the amount owed on the mortgage.

June sales of such distressed properties declined 63 percent from a year ago. Now more than eight in 10 sales involve homes of owners with equity. In the depths of the housing crisis, that rate was fewer than three in 10.

Banks appear more willing now to work with homeowners who fall behind on their mortgage payments, Freeman said. Years ago some experts feared a large "shadow inventory" of distressed properties would come to hurt the market, but such inventory never materialized and "it's certainly not going to show up now," Freeman said.

Laws said home sales above $800,000 had lagged in recent years because "the market recovers from the bottom up." This year's jump in sales for that price segment suggests a healthy increase in confidence among both buyers and sellers, he said.

Agents said many buyers in the upper-end segment are seeking second homes and have the ability to buy without immediately getting a loan.

"Cash buyers from the Bay Area are making their way up to Sonoma County because they see it as a value," said Craig Curreri, a broker associate with Pacific Union International in Santa Rosa.

Jeanne DeLario said buyers in virtually every price range are selling stocks and other investments in order to be able to raise the cash needed to buy homes. After making the purchase, some will obtain a mortgage but they hope such a strategy will make them more competitive in the search for a home.

Healdsburg attracts buyers from the Bay Area but also from around the United States, said John DeLario.

"It's amazing the amount of out-of-town buyers that we get," he said.