Home sales fell sharply in Sonoma County in January, tumbling 30 percent from December, according to a new report.
Buyers purchased 254 single-family homes in January, the third straight monthly decline in sales, said Rick Laws, manager of Coldwell Banker in Santa Rosa, which compiles data for The Press Democrat monthly housing report.
The median price slipped to $353,000, down nearly 9 percent from December but up 12 percent from a year ago.
The decline in sales followed a flurry of activity in the fall, when first-time homebuyers were racing to beat a November deadline to receive a federal tax credit. That credit eventually was extended, but by then many deals already were underway.
A limited supply of homes priced for first-time buyers also hampered sales in January, according to real estate agents and brokers.
"Everything I'm putting on the market, I'm getting multiple offers on," said Brenda Alarcon, an agent with Creative Property Services in Santa Rosa.
The housing market normally slows over the winter, and January sales remained near their five-year average. Even so, the sales numbers were down 25 percent compared to January 2009.
Laws noted two signs that may indicate the market is gathering momentum. The number of new listings jumped last month, and buyers reacted with the largest number of homes going under contract in three months.
"Demand soaked up a huge chunk of what actually came to market," he said.
The result is that the number of homes listed for sale decreased 11 percent last month to 1,147. The inventory has decreased 40 percent from January 2009.
The median price for the county's single-family homes peaked at $619,000 in August 2005 and bottomed at $305,000 last February. For five of the past six months, the price has held between $350,000 and $360,000.
Nationally there have been fears that a slow economy and another wave of foreclosures could force a second dip in housing prices. However, local real estate agents maintain that prices won't fall much further. Many homes now sell for less than their replacement value, said Stephen Liebling, manager of Coldwell Banker in Sebastopol.
"That just doesn't make any economic sense," Liebling said. "And we will come back."
For months agents have said buyers in the starter home market are facing stiff competition for properties, many of them foreclosures or short sales. The latter refers to owners who owe more to lenders than the home is worth.
Paul Heck, an agent with RE/MAX in Santa Rosa, said young buyers have had problems finding homes that will satisfy new lending rules.
As well, they can have trouble affording foreclosure homes that have been renovated by investors and placed back on the market. The cost of the improvements often "puts them out of the range of a lot of first-time homebuyers," Heck said.
Even so, he doubted that prices will fall much further because of strong interest by investors in acquiring properties.
Laws said the number of new homes under contract suggests that interest remains strong among homebuyers seeking to take advantage of the federal tax credits.
First-time buyers can receive an $8,500 credit and existing homeowners can receive a $6,500 credit for purchasing another home as principal residence. To qualify, the buyer must sign a binding contract by April 30 and complete the purchase by June 30.
Cory Maguire, an agent with Frank Howard Allen in Sebastopol, said the starter market remains a tough place for buyers to obtain homes and for agents to win sales.
"I thought last year there would be a double dip," Maguire said of home prices. "This year I don't know because the inventory is so low."
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