Sonoma County homebuyers last month continued to snap up properties at the fastest pace in nearly seven years.
Buyers purchased 500 single-family homes last month, up 21 percent from a year ago, according to The Press Democrat's monthly housing report compiled by Pacific Union International Vice President Rick Laws.
It was the third straight month where county sales reached or exceeded 500. From May through July, buyers purchased 1,541 homes, the most for any three-month period since 1,600 homes were sold between August and October of 2005.
"This is what recovery looks like," Laws said this week when sharing similar data at the Santa Rosa breakfast meeting of the North Bay Association of Realtors.
July's median price remained essentially flat from June at $348,500. The price increased 7 percent from July 2011.
In what became a historic housing bubble, the county's median price hit a record high of $619,000 in August 2005, before tumbling to $305,000 in February 2009.
At the bottom of the market, three out of every four home sales involved foreclosures or short sales, where the price is less than the amount owed on the mortgage.
But last month 62 percent of the completed transactions involved sellers with equity. Of the remaining sales, 25 percent were short sales and 13 percent involved foreclosures.
Laws maintained that the increase in equity sales is good news for the housing market because it means "people actually have money to buy something after the sale."
To date this year, county home sales have increased 22 percent from the same period in 2011. Sales have risen in most price ranges.
However, the supply of available homes for sale at the end of the month was about half the amount of a year earlier, Laws said. The July 31 inventory of 1,032 homes represented roughly a two-month supply at the current sales pace.
One reason for the lower inventory is the number of new listings of foreclosures and short sales fell in July to 146, a decline of nearly 35 percent from a year ago. It was the lowest number of new distressed listings in more than three years.
The lack of inventory had led to multiple bids for many homes, especially in the lower price ranges, agents said. And buyers who must obtain a mortgage may find themselves at a disadvantage to those who can pay cash for the properties.
Pam Bradford, a broker associate with Praxis Realty in Santa Rosa, said 33 percent of all county houses and condos sold in July went to those who paid all cash, versus 25 percent a year earlier.
"More deals are going to those cash buyers," Bradford said.
Buyers who seek financing also can encounter difficulty if the needed appraisal comes in too low. This can occur when an appraiser concludes that no comparable home has recently sold for as much money as the proposed price.
Mark Gold, an agent with Century 21 Northbay Alliance in Santa Rosa, said homes didn't appraise for the initially agreed-upon sales price in four of his last 12 deals.
"I lost one. I closed three," Gold said of the deals where appraisals became an issue. The three completed sales occurred because buyers and sellers were willing to compromise on the final price and the down payment needed to secure a loan.