Sonoma County home prices remain flat

Sonoma County home buyers in November signed the most purchase agreements for the month in four years, a sign to brokers that demand remains relatively strong at the end of the year.

Buyers and sellers signed 394 contracts last month, an increase of more than 12 percent from a year earlier, according to The Press Democrat’s monthly housing report, compiled by Pacific Union International Vice President Rick Laws. That was the most since November 2011, when 449 purchase agreements were put together.

However, the number of completed sales last month occurred at a slower pace, one that appears more in keeping with the autumn housing market. Buyers took possession of 365 single-family homes last month, an increase of 1 percent from November 2014.

“The buyers are still out there late in the year,” Laws said, pointing to the large number of deals made last month.

Nonetheless, sales are expected to keep falling over the next few months. This is partly because fewer sellers put homes on the market in late fall, part of a typical pattern that sees new listings rise sharply in spring and decline markedly in autumn and winter.

Also, not all signed sale agreements will result in completed transactions. Some of the contracts signed in November will fall through, while others will be completed this month or early next year.

The county’s median single-family home price remained essentially flat in November at $528,000. The median this year peaked in June at $546,000 and last month remained nearly 10 percent higher than a year earlier in November.

County home prices hit a record $619,000 in August 2005 in the midst of a historic housing price bubble. The peak was followed by a painful crash, with median prices hitting bottom at $305,000 in February 2009.

Home sales to date this year have slightly surpassed the pace of 2014, which ended with more than 4,700 single-family homes sold.

For three years, the market has contended with a smaller number of homes available for sale. That trend continues, with fewer than 700 homes for sale at the end of November, less than a two-month inventory at the current sales pace.

Stephen Liebling, manager of the Coldwell Banker office in Sebastopol, said transactions remained “surprisingly strong” in November, but this month the market seems to be slowing as people take time to enjoy the holidays.

To Liebling, that’s a welcome change from those days in the housing downturn when business remained active in winter mostly due to foreclosures and transactions involving financially distressed properties.

“It’s feeling more like it used to feel in the good old days,” he said.

The brokers spoke before Wednesday’s announcement that the Federal Reserve is raising interest rates by a quarter-point after seven years of near-zero borrowing rates.

But Cary Bertolone, a co-owner of Bertolone Realty in Santa Rosa, earlier predicted that the market won’t slow much next year after a small increase by the Fed because mortgages rates still will remain historically low.

Bertolone expected sales to continue at a similar pace in 2016, though perhaps with less appreciation in the median price. Many sellers and agents are learning they have to be careful in the price they set for properties.

“If you overprice them,” he said, “they’ll sit there.”

Pam Bradford, a broker associate at Praxis Realty in Santa Rosa, said demand remains strong for the relatively few homes available in the starter home segment. According to data from Laws, homes priced under $400,000 made up just 7 percent of the available inventory at the end of November, but they comprised 14 percent of the homes that went into escrow last month.

“Those are getting scooped up,” Bradford said.

While activity has diminished, some buyers remain in the hunt this month in the hopes of finding properties that need to be sold soon. Such buyers, said Bradford, are “hoping to get a little holiday seller motivation.”

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