Sonoma County’s housing market slowed in July

Sonoma County’s housing market slowed markedly in July, leading real estate brokers to wonder whether a sluggish pace of sales in the Bay Area is moving north.

County home sales declined nearly 17 percent last month from a year earlier, according to The Press Democrat’s monthly housing report, compiled by Pacific Union International senior vice president Rick Laws. Buyers in July purchased 450 single-family homes, the lowest number for the month in five years.

New listings, meanwhile, declined 20 percent from a year earlier, falling to the lowest level for July in at least seven years. That second drop, which will mean fewer available properties in an already tight housing market, caught brokers by surprise.

“It’s only one month,” said Laws, “but it was enough for me to go, ‘Wow, what’s going on?’”

Tom Kemper also said the July activity could be an aberration but the drop in new listings was “just staggering.”

“This is supposed to be summer,” Kemper said, normally a time at or near the height of the home sales season.

The county’s median sales price for a single-family home declined 4 percent from June to $575,000. The median price remained nearly 6 percent higher from July 2015, when it was $545,000.

Brokers emphasized that home sales still could pick up this month and remain strong into autumn. But they also acknowledged reports of slower sales in San Francisco and elsewhere in the Bay Area.

Sales in six Bay Area counties declined 10 percent for the first half of the year compared with the same period in 2015, according to data released Thursday by PropertyRadar, a Truckee company that tracks real estate data using county records.

The six counties, San Francisco, Marin, Alameda, Contra Costa, San Mateo and Santa Clara, together reported the lowest sales for the six-month period since 2008.

In contrast, Sonoma County sales for the first six months declined just 2 percent, according to Laws’ report, which uses multiple listing service data. However, after the plunge in July activity, year-to-dates sales for the county now have declined more than 4 percent from a year earlier.

Madeline Schnapp, PropertyRadar’s director of economic research, predicted that the slower sales will continue in the region’s urban communities and will extend to suburban and exurban areas like Sonoma County.

“Your really high-priced areas are going to feel it first and then it’s going to spread out to the broader Bay Area,” she said. She attributed the decline to a combination of tight inventory levels and “really high” prices. The slowdown in sales could lead to a pause in rising prices, she said, perhaps in 2017.

Over the last 15 years, Sonoma County has witnessed the rise of a national housing bubble, followed by a historic crash and a rebound that is now in its fifth year. The median price here hit a record high of $619,000 in August 2005, then sank to a low of $305,000 in February 2009. Starting in 2012, the median prices have risen each year by an annual rate of 8 percent or more.

Brokers said they will be watching home sale activity in the coming months because a drop in demand typically leads to a slowing or even a halt in appreciation.

“The slack in sales is what softens price,” Laws said.

Inventory at the end of July amounted to less than a two-month supply of available homes at the current sales pace. That is generally considered a sign of a seller’s market.

To the extent the market is slowing, brokers suggested it may be due partly to the wariness of buyers over current home prices and partly to the relatively small number of houses on the market.

Intuition may suggest that the low inventory is a boon for those selling properties, but brokers said many potential sellers are holding back because they fear they won’t be able to find a new home if they sell their current one.

Maria Lounibos, a broker associate with Sotheby’s International Realty in Sonoma, said she hopes her business will pick up before the end of summer. Nonetheless, she and other brokers report fewer listings and fewer multiple offers for homes now on the market.

For the most part, Lounibos said, “the people that are buying and selling right now are the people that have to.”

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