Sonoma County homebuyers signed contracts to purchase low-priced short sales and more expensive houses last month at a level reminiscent of the days before the housing bubble deflated five years ago.
Buyers signed contracts to purchase 583 single-family homes in February, up 62 percent from a year ago, according to The Press Democrat's monthly housing report compiled by Pacific Union International Vice President Rick Laws.
That was the most contracts signed for any month in at least three years and likely was the best February since 2005, Laws said.
"What you're seeing now are the signs of an improving market," said John Duran, president of the Santa Rosa chapter of the North Bay Association of Realtors.
At Tuesday's weekly chapter meeting, agents spoke of the difficulty they have in finding homes available for sale.
"They have buyers looking but nobody has listings," Duran said.
Not all the signed contracts will result in completed sales. Even so, agents and brokers are taking comfort that more deals were signed in the price segment between $400,000 and $900,000, where sales have been sluggish for at least three years.
To date this year, buyers have signed contracts for 277 houses in that price range, up 56 percent over the same period a year ago.
"This activity level has permeated nearly every price range," Laws said. It's a contrast from recent years when "people were just not coming to the party."
In February, buyers completed purchases of 352 single-family homes, up nearly 15 percent from a year earlier.
The median home price fell 3 percent from a year earlier to $314,950. It was also down 3 percent from January.
County home values peaked in 2005 with an annual median price of $595,000. Prices began a steep slide in 2007 and hit a new low last year of $325,000, a level last seen in 2000.
February ended with 1,031 homes for sale, the smallest amount for any month in almost seven years and roughly a three-month inventory at the current sales pace.
Pam Bradford, a broker associate with Praxis Realty in Santa Rosa, said she is seeing more buyers in the range between $400,000 and $900,000. She mentioned the experience of clients who are seeking a home in the range of $650,000.
"We've been looking for a long time, and we keep getting in multiple-offer situations," Bradford said.
Many agents and brokers see the increasing number of signed contracts and the declining inventory as signs the market is stabilizing.
But C.J. Holmes, owner of CJ Holmes Brokerage in Santa Rosa and a leader in the local group Homeowners for Justice, said it will be difficult for prices to rise with so many foreclosures and short-sale properties coming to market.
"I do see lots of strong headwinds," Holmes said.
Last month buyers signed contracts for a record 216 short sales, an increase of 177 percent from a year earlier. The median price was $289,000.
For the past six months, the number of short sale contracts has nearly doubled compared to a year earlier.
A completed short sale means the home was sold for less than the amount owed on the mortgage. In the past six months, the county has reported 545 completed short sales, up 33 percent from a year earlier.
The Press Democrat Poll: Housing Bond
Would you support or oppose a proposed $300 million housing bond to help subsidize the construction of tens of thousands of new homes in the region, including many affordable units?
Support – 62 percent
Oppose – 31 percent
Don’t know – 7 percent
Liberal Democrats – 73 percent support
Conservative Republicans – 35 percent support
Renters – 73 percent support
Homeowners – 54 percent support
Under 45 years old – 75 percent support
Over 45 years old – 56 percent support