Sonoma County’s housing market continues to sputter amid lower sales, but one category of homes remains a striking exception: those fetching prices of $1 million or more.
The number of single-family homes selling for $1 million or more has increased 45 percent during the first four months of the year, according to The Press Democrat’s monthly housing report, compiled by Pacific Union International senior vice president Rick Laws. Over the same period, homes selling for $999,999 or less declined 13 percent.
The increased sales at the upper end of the market aren’t a one-year fluke. A review of available data reveals that sales in the million-plus segment have tripled in the past five years, even as they plunged 35 percent in the rest of the market.
Sales are increasing in the upper end of the market in part because rising home values have pushed many properties into the million dollar segment, brokers said. That fact may help explain why the segment also has enjoyed an increase in new listings, in contrast to the overall market where new listings are at their lowest level in at least eight years.
But brokers said the county’s luxury market also is benefiting from its regional proximity to communities with much higher housing costs.
“I think there’s a lot of buyers that are coming out of Marin and the Bay Area that see Sonoma County as a deal,” said Laws.
In Santa Clara, Marin, San Francisco, and San Mateo counties, the median home price in April ranged from $1.2 million to $1.5 million, according to the California Association of Realtors.
From those four counties came buyers who purchased one-fifth of county homes sold by Pacific Union International from January 2016 through March 2017, according to a report provided by Laws. The results, which showed about a third of the company’s total sales here were made to out-of-county buyers, were based on 320 completed surveys.
For the entire county market, buyers in April purchased 344 single-family homes, the lowest figure for the month in nine years. Similarly, sales for the first four months of 2017 are off to their slowest start since 2008.
The county’s median sales price last month slipped to $615,000. The April median declined 3 percent from a record high set in March, which was revised down slightly to $635,000. However, last month’s median price still increased 9 percent from a year earlier.
The previous record for median price here was $619,000 and had been set in August 2005, roughly two years before home values began an unprecedented plunge amidst a national housing crisis and Great Recession. In the upheaval that followed, the county’s median price hit a low of $305,000 in February 2009.
However, in the last five years the median has nearly doubled, as the rest of the economy also improved.
Homes sales haven’t slowed from a lack of demand but from a lack of properties for sale, brokers insist, which puts upward pressure on prices. And the inventory remains skewed toward the luxury market.
Pam Bradford, a broker associate with Praxis Realty in Santa Rosa, noted the county has only about a month’s worth of inventory for homes priced under $1 million.
Tale of Two Price Points
In the past five years, sales and new listings have soared for homes costing $1 million or more, even as they have declined in the rest of the real estate market.
Sales of homes $1 million or more
January to April 2012: 59
January to April 2017: 181
Percentage change: 207%
Sales of homes below $1 million
January to April 2012: 1538
January to April 2017: 1004
Percentage change: -35%
New listings for homes $1 million or more
January to April 2012: 150
January to April 2017: 333
Percentage change: 122%
New listings for homes below $1 million
January to April 2012: 1997
January to April 2017: 1324
Percentage change: -34%
Source: Press Democrat Housing Report/ Rick Laws, Pacific International