In 2012, Susan Rapp saw firsthand how patience has its rewards.
Rapp, a Petaluma resident, said she endured eight "grueling" months waiting for a bank's permission to purchase a four-bedroom, custom-built home across town. She locked in the price for the short sale in January and then wondered what would happen with home prices.
By the time escrow closed in September, values had risen. As a result, Rapp and her husband last fall sold their five-bedroom, east Petaluma tract home for nearly $800,000 — more than they had expected and more than they had paid for the 3,250-square-foot home on the city's desired west side.
"I was one of the fortunate ones who was able to buy low and sell higher," said Rapp, an attorney in San Francisco. She said the new house, reminiscent of her childhood home in San Jose, likely would have cost more than she could have afforded during the housing bubble.
Last year marked an upturn in Sonoma County's housing market.
Five years ago prices took a historic plunge, followed by a deluge of distressed properties and a lack of buyers for mid-level and million-dollar homes. In the dark days of 2009, three out of four sales were foreclosures or short sales, where the home is purchased for less than the amount owed on the mortgage.
But last year, the market experienced a sharp uptick in home sales above $500,000, a decline in distressed sales, a shortage of inventory, low mortgage rates and a rise in prices.
"The market's come off the bottom," said Cynthia Wood, a broker associate with Sotheby's International Realty in Sonoma.
Home prices hit the floor in Sonoma County in 2011, when the annual median price fell to $325,000, down 45 percent from the 2005 peak of $595,000.
Last year, the median price rose 8 percent to $350,000, according to The Press Democrat's monthly housing report compiled by Pacific Union International Vice President Rick Laws.
Agents attributed the increase partly to the jump in the sale of more-expensive homes. But they maintained that home values also have risen.
Support for that view comes from property information service CoreLogic. Based on same-home sales, it estimates that prices for non-distressed homes in the county increased nearly 9 percent in November from a year earlier. In comparison, the company estimated that national home prices rose nearly 7 percent for the same period.
Agents contended that confidence rose last year among both buyers and sellers, something that was in short supply as prices plunged.
"People were afraid of pulling the trigger back in 2008," said Peg King, who with her son Jeremy are agents with Coldwell Banker in Petaluma.
The two agents, who helped Susan Rapp buy and sell her properties, teamed up to represent buyers or sellers in 61 home sales in 2008. But last year, that number increased to 97, a record for Peg King during her 34 years in business.
County home sales increased 16 percent last year to nearly 5,400 single-family homes, the most since 2005.
Those sales shifted toward more affluent neighborhoods and places that draw second-home buyers. Among those communities was Petaluma, where sales rose 23 percent last year.
Russian River sales volume jumped 43 percent last year; Healdsburg, 31 percent; Sonoma, 23 percent; east Santa Rosa, 21 percent; and Sebastopol, 20 percent.