Sonoma County home sales down 10 percent

Sonoma County’s single-family housing sales decreased by 10 percent in October from the same period in 2015 as buyers faced a growing inventory crunch, especially among houses priced less than $500,000.

There were 389 single-family homes sold last month, a figure that also reflected a 10 percent decrease from September of this year. Overall, that housing category is 3 percent down compared to the first 10 months of last year, according to The Press Democrat’s monthly housing report, compiled by Pacific Union International senior vice president Rick Laws.

Laws said there is a good possibility that the number of homes sold in 2016 will be fewer than in 2015.

Inventory continues to be challenging for prospective buyers.

The number of single-family listings at the end of October decreased 15 percent compared to September, and is down 22 percent compared to October 2015.

New listings during the summer months this year declined to levels not seen since 2009.

“We are not adding to the housing stock, whether rental or in homes,” Laws said.

Even a new project next to Sonoma State University’s Green Music Center, which will add a total of 175 new single-family homes, will not make much of a dent, Laws said.

Melissa Nelson, 30, and her husband recently sold their northwest Santa Rosa home for $500,000 through Pacific Union, and they experienced the county’s inventory problems firsthand. While happy with the home they bought in Rincon Valley, Nelson recounted one period when nothing in their price range came on the market for three weeks.

“The house we ended up purchasing was a house we ended up going back and looking at because we didn’t have enough to consider,” she said.

“It wasn’t like a love at first sight type of thing. It was more of a, ‘OK, this is what we have to work with,’ and in comparing that house to others we were looking at, that house ended up standing out to us.”

Nelson said the county’s inventory is “just not there” and called the market for homes in the $500,000 to $550,000 “really crappy right now.”

Inventory has been an issue for the Sonoma County housing market for all of 2016, said Brian Connell, managing broker at Coldwell Banker’s Mission Boulevard office in Santa Rosa, who called it a “very, very tight year” for listings.

“I think a big part of the issue is that the folks who are inclined to sell maybe are a little more thoughtful about it, because they’re not quite sure they’re going to be able to get what they want after they sell,” Connell said. “Let’s say you’re going to move up and you don’t have any place to buy because there’s not a lot of inventory to buy. That makes you rethink whether or not you’re going to sell right now.”

The inventory problem is most acute among homes priced for first-time home buyers looking to enter the housing market. For example, in 2016 there has been a 49 percent decline for home sales in the range from $300,000 to $399,000, and a 19 percent drop in homes priced from $400,000 to $499,000.

“Increasingly, affordability is an issue,” he said.

Condominiums fared a little better, as 62 sold last month in the county, a 3 percent increase over the same period in 2015. Year to date, condominium sales are up 4 percent so far through 2016.

Median home prices still appear stable. The median price for a single-family home in the county was $595,000 last month, which is a 1 percent decrease from September.

The market has settled in recent years after the median price hit a record of $619,000 in August 2005 then tumbled after the 2008 financial crisis, with a low of $305,000 in February 2009. Prices began to rebound in 2012.

Connell said his data showed September’s median list and sales prices were up about 10 percent year over year, and he expected the trend to continue in October.

Still, Bill Facendini, president and co-owner of Terra Firma Global Partners in Santa Rosa, said the negotiating price between buyers and sellers seems to have evened out this year.

“Buyers just aren’t willing to continue to pay inflated prices, or what they feel are inflated prices, in this marketplace,” he said.

While six months ago a seller could be reasonably assured that a listing would attract an immediate offer, that isn’t necessarily the case this fall, said Tom Kemper, manager of the Coldwell Banker office on Bicentennial Avenue in Santa Rosa.

“I have seen in the last 45 days an uptick in buyer activity, but not necessarily writing contracts,” Kemper said. “The activity is back, but the sales aren’t as strong.”

For example, one Santa Rosa home listing at $500,000 had visits from 80 different potential buyers over one weekend, he said, but only 12 submitted an offer on the house.

Other parts of the Bay Area appear to be experiencing some of the same trends as Sonoma County. Through September of this year, sales of single family homes and condominiums across six Bay Area counties - excluding Sonoma County - declined 10.3 percent year over year, according to data released Friday by Truckee-based PropertyRadar.

Among the six counties - Alameda, Contra Costa, Marin, San Francisco, San Mateo and Santa Clara - sales dropped most for homes priced at $500,000 or less. In that price range, sales fell 26.7 percent year over year, according to PropertyRadar.

During the same nine-month period, Sonoma County’s home sales also declined but not by as much as the other counties overall. Sales of single-family residences and condominiums here were down 2.4 percent through September, according to Madeline Schnapp, PropertyRadar’s director of economic research.

As with the other counties, the decline was driven by a “fairly dramatic fall-off” in sales of distressed properties, according to Schnapp, who attributed that to a recovery in the housing market and lack of foreclosures and short sales.

Distressed property sales declined 20.1 percent in Sonoma County and 35.7 percent in the other six Bay Area counties.

Non-distressed property sales, meanwhile, were actually up 2 percent in Sonoma County and down 7.1 percent in the other counties, according to Schnapp.

“The problem boils down to lack of inventory, not lack of demand,” she said in an email. “If there aren’t enough properties for sale, prospective buyers lose interest and those with properties for sale don’t sell because they can’t find something to buy, and the vicious cycle continues until more inventory becomes available.”

You can reach Staff Writer Bill Swindell at 707-521-5223. You can reach Staff Writer J.D. Morris at 707-521-5337 or jd.morris@pressdemocrat.com. On Twitter @thejdmorris.