Predictions for Sonoma County's real estate market next year offer room for hope, but also reason for worry.
A positive perspective came from Rick Laws, the producer of The Press Democrat's monthly housing report and a managing vice president for Pacific Union International in Santa Rosa.
A further drop in prices seems unlikely given the relative demand by home buyers, he said. For the first 11 months of the year, home buyers and sellers signed contracts for 4,700 single-family homes, up 18 percent over the same period last year. Not all those contracts result in a completed sale.
Also, inventory in November fell to less than 1,400 houses — down 23 percent from a year ago and less than a four-month supply at the current sales pace.
"Our sales and demand is surprisingly high and has picked up significantly in the last several months," Laws said.
Even so, Laws and other real estate managers said sales remain weak for homes priced between $400,000 and $800,000. About half of the sales last year were foreclosures or short sales, where the price was less than the amount owed on the mortgage.
With the distressed properties, "there's no equity coming out of those sales," said Randy Waller, broker owner of W Real Estate in Santa Rosa. Thus, the sellers aren't able to move up to more expensive homes.
Randy Coffman, manager of the CPS real estate office in Sebastopol, said Sonoma County needs fewer investors and more owner occupants buying the starter homes now available for sale.
"That is so important for our future market three to five years from now," Coffman said.
Another barometer of the economy is commercial real estate.
"What we've seen is that the quality properties have rented quite well and they've gone to health care companies, medical devices and tech startups," said Al Coppin, president of Keegan & Coppin, the North Bay's largest commercial real estate company.
"We have a lot of single-story, tiltups in business park locations," he added, and "there's a great deal of uncertainty for folks on Main Street about what to do."
They are reflecting on what is going on politically heading into an election year and with the economy in Europe.
The anticipation was that 2011 could be a turnaround year, but it was more neutral, with 2012 shaping up as "an up and down year," Coppin said.
For the coming year, a key economic development effort will be a public/private sponsorship that seeks to create 4,000 new jobs. The Building Economic Success Together, or BEST program, already has raised more than $2.4 million and has five task forces meeting to devise detailed plans.
<i>Staff Writer Robert Digitale blogs about local real estate at realestate.blogs. pressdemocrat.com. He can be reached at 521-5285 or robert.digitale@ pressdemocrat.com.</i>