In another sign of the challenge facing local homebuyers, a new study ranks Sonoma County as one of 10 communities in the U.S. with the most extreme housing shortages.
The county ranked ninth last year, according to housing listing website Realtor.com. The study was the company’s first attempt to look at what portion of a community’s homes are on the market and whether that inventory is growing or decreasing. Sonoma County’s supply of homes for sale was small and the inventory was shrinking.
The other places that made the top 10 list include northwest metropolises like Seattle and Portland and Rust Belt communities like Detroit and Buffalo, New York.
The rankings are a reminder that inventory around the nation has been declining steadily for more than two years, Jonathan Smoke, the company’s chief economist, said Wednesday.
“It basically underscores that this phenomenon isn’t rare,” Smoke said. “These 10 markets are the most extreme, but it’s basically been true for the entire country.”
Local real estate brokers weren’t surprised that the county was tagged as a tough place for buyers to find homes.
“The bottom line is we haven’t had enough units built over the last few years to even come close to the demand,” said Bill Facendini, president and broker of Terra Firma Global Partners in Santa Rosa.
At the top of the list was Seattle, followed by Eugene, Oregon, and Grand Rapids, Michigan. Buffalo, New York, ranked fourth, followed by Fort Wayne, Indiana, Sacramento, Detroit and Portland, Oregon.
Santa Rosa and Omaha, Nebraska, rounded out the top 10.
Only a few surprises
For local brokers, the only surprises involved which other communities were or weren’t on the list.
Brian Connell, managing broker at the Santa Rosa Mission office of Coldwell Banker, said he would have expected other Bay Area cities to make the rankings, too. Also, he was surprised that Detroit and Buffalo rose so high.
“I don’t ever remember Rust Belt cities making this kind of list,” Connell said. In one sense, he said, “that’s probably good news” for those communities.
Smoke said Detroit has experienced an upturn in both its economy and its real estate market.
“That is an area of the country that is truly turning around,” he said. Detroit even has appeared in some months on the website’s “hottest markets” list.
When it comes to housing prices, Detroit, Buffalo, Fort Wayne and Grand Rapids all have “affordability going for them,” Smoke said.
“We’re seeing very large numbers of millennials, people under 35, purchasing homes in those markets,” he said.
Behind city’s ranking
It helps to understand the Realtor.com criteria to grasp how Santa Rosa rose so high in the standings of the nation’s 150 largest housing markets.
First, the company looked at the ratio of homes typically on the market in a community compared to the entire housing stock there, including rentals and vacant properties.
Seattle, the top-ranked city, and Santa Rosa both had just 0.4 percent of their housing stock for sale. That amounts to about one in every 263 housing units.
In contrast, about 1.4 percent of the nation’s homes were for sale last year.