The return of the $550,000 home in Sonoma County

Sonoma County’s median home sale price hit $550,000 in June, as tight supplies and ongoing demand have helped increase the median for four straight years.

The median price of a single-family home increased 11 percent last month from a year earlier, according to The Press Democrat’s monthly housing report compiled by Pacific Union International Vice President Rick Laws. It hasn’t been this high since February 2007, when it also stood at $550,000.

“It’s going close to the heights of the market in 2005,” said Cary Bertolone, a co-owner of Bertolone Realty in Santa Rosa.

The county’s median price peaked at $619,000 in August 2005 during a national housing bubble fueled partly by relaxed lending standards. What followed was a historic crash that saw the median sale price plunge to $305,000 in February 2009.

The median price has risen 72 percent since June 2011, when it stood at $315,000. Some of that gain has come from rising home values and some from an increase in home sales in the county’s more expensive neighborhoods.

Despite the ongoing rise in prices, brokers and agents stressed that the housing market today remains far less active than 2013, when the median price jumped 23 percent in one year, or 2012, when home sales jumped to their highest levels since 2005.

“It’s a sellers’ market, but it’s not crazy,” said Glenn Gephart, general manager and an owner of Century 21 Alliance in Santa Rosa.

Buyers purchased 499 single-family homes last month, an increase of nearly 5 percent from a year earlier.

For the first half of the year, 2,195 homes have been sold in the county, a gain of less than 1 percent from a year earlier. The amount of those sales totaled $1.4 billion, an increase of 9 percent from the same period of 2014.

June ended with about 800 homes available for sale, less than a two-month supply of inventory at the current pace. Most experts consider such a low supply a sign of a sellers’ market.

And the inventory isn’t likely to grow significantly, given the current demand, Laws said.

He noted that last month 581 single-family homes came to market as new listings, but during that time buyers signed contracts for 538 homes. The result was a net inventory gain of only 43 homes, and that doesn’t account for other properties that sellers decided to take off the market.

Some homes on the market still are drawing multiple offers, agents and brokers said.

But sales today increasingly involve agreements where the deal is contingent on a buyer first selling another home or a seller first finding a replacement property. Many suggested that such contingency deals are part of the normalization of the market.

And correct pricing has become more important today than two years ago when buyers sharply bid up the values of properties.

Stephen Liebling, manager of the Coldwell Banker office in Sebastopol, said he is cautioning sellers against setting the price too high for their homes.

“They really need to be priced at or below market to generate interest, even with the constrained inventory,” he said.

Several agents and brokers said they’ve been surprised this year to see some homes garner offers for far more than the expected value, while other properties with seemingly fair prices failed to draw a single bidder.

“It is a strange pricing market,” said Trish McCall, an agent with Keller Williams in Santa Rosa.

McCall said her approach is to recommend a price that she believes she can justify to a real estate appraiser. Once she arrives at such a price, she said, “the market will either drive it up or down from there.”

You can reach Staff Writer Robert Digitale at 521-5285 or robert.digitale@pressdemocrat.com. On Twitter @rdigit.