Home sales may be down 8 percent in Sonoma County this year, but the local housing market remains a study in the three fundamentals of real estate:
Location. Location. Location.
Some areas, primarily more affluent communities, have seen sales increase this year while others, mostly starter-home neighborhoods, have seen far bigger drops in sales than the overall county average.
In southwest Santa Rosa, for example, sales plunged 46 percent during the first seven months of the year, compared with the same period for 2009.
Last year buyers purchased 334 homes there, compared with 180 through July of this year. Real estate brokers and agents say the reason is that fewer foreclosures and other distressed properties came onto the market this year.
Elsewhere in the county, sales dropped 26 percent in northwest Santa Rosa, 25 percent in Cloverdale, 14 percent in Rohnert Park/Cotati and 11 percent in southeast Santa Rosa.
In contrast, sales rose 43 percent in the Oakmont retirement community, 21 percent in west Petaluma, 12 percent in Sebastopol and 10 percent in northeast Santa Rosa.
"2009 was fueled by lower-priced, distressed-sale inventory," said Rick Laws, manager of Coldwell Banker in Santa Rosa and the producer of The Press Democrat's monthly housing report.
In February 2009, three out of four homes sold in the county were foreclosures or short sales, where the purchase price was less than the mortgage amount. By last month, such sales made up 42 percent of the total sold, still high by historic standards.
"I think we're beginning to see people come into the market for traditional reasons, not fire-sale reasons," Laws said.
The county recorded 2,526 home sales for the first seven months of 2010, down from 2,759 a year earlier.
Prices, however, have climbed — another indication that foreclosures no longer dominate the market. The county's median home sales price to date this year is up 8 percent to $350,000.
In the past five years, housing prices often took the steepest drop in neighborhoods that have newer subdivisions and an abundance of homes inhabited by first-time buyers. Many of those buyers had little time to build up equity in their houses.
"If you're living within walking distance of the square in Healdsburg, you're not feeling as much pain as you are if you're living in southwest Santa Rosa," said John Duran, a broker with Frank Howard Allen in Santa Rosa.
This year the difference in sales for the starter-home neighborhoods was due partly to fewer houses on the market.
"There's a lot, lot less inventory out there," Prudential California Realty agent Tonie Murphy said of southwest Santa Rosa. Last month, she helped investors buy a 1,880-square-foot, three-bedroom home on Aussie Avenue for $289,250.
The year-to-date median price in southwest Santa Rosa increased 12 percent from a year earlier to $275,000. Agents said some of that increase is due to the sale of bigger, fancier homes, but also to a rebound in home values.
Martha Hernandez, broker/owner of Martha Hernandez Realty in Santa Rosa, said she has found the same homes selling for about $240,000 a year, compared with around $180,000 a year ago.
"I'm not finding as much listings available ... under $200,000," she said.
In Petaluma, west side sales were up 21 percent, while on the east side sales fell 7 percent. Agents and brokers said the reasons were hard to pinpoint. But they noted the east side caters to more first-time buyers, while the west side attracts more move-up buyers who already have a home and often some equity.
Those west side buyers often "have the cash and can move on something quicker than a first-time homebuyer can," said Rich Johnson, broker/owner with CPS Golden Lane Realty in Petaluma.
Robert Ramirez, a broker with Coldwell Banker in Petaluma, said there seems to be less fear that the market will fall a lot further in the coming months.
"I think there's a pretty good belief, at least with the buyers, that it pretty much bottomed," said Ramirez, who helped a couple this spring purchase a 1,400-square-foot, three-bedroom home on Sunnyslope Road in west Petaluma. The price was $425,000, plus a $10,000 credit.
Oakmont has recorded 90 home sales to date this year, compared with 63 a year earlier.
"I think probably the main reason is sellers have become accustomed to the new reality of lower prices," said Mike Higgins, broker associate at the Century 21 Valley of the Moon office in Oakmont.
He noted the retirement community includes owners who owe little or nothing on their homes.
"On the buying side," he said, "even though the economy's hurting, we still have people who can afford to buy in Oakmont."
In most communities, an uptick in sales was accompanied by a decrease in the median home price. But the Sonoma area was an exception, where sales were up 8 percent and the median price jumped 19 percent.
"What we are seeing in the Sonoma Valley is pricing going higher," said Bill Dardon, owner and general manager of The Real Estate Company in Sonoma. One reason is a drop in the number of lower-priced foreclosures and other distressed properties.
The Russian River area was another exception to the general trends. Sales there increased 14 percent even though the area attracts many first-time buyers and has the lowest median price of any tracked community in the county, $215,000 to date this year.
Herman Hernandez, broker/owner for Frank Howard Allen in Guerneville, said unlike other communities, the river area saw an increase in the availability of bank-owned properties, known as "real estate owned," or REO.
"When I look at the REOs coming into the market, there continues to be a pretty good stream of those coming on, and they're coming on at pretty good prices," Hernandez said.
Staff Writer Robert Digitale blogs about local real estate at realestate.blogs.press
democrat.com. He can be reached at 521-5285 or robert.digitale@pressdemocrat.com.
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