Fueled by a rush for housing after wildfires burned thousands of homes, a record amount of money changed hands in the Sonoma County real estate market at the end of 2017.
In the final two months of the year, buyers purchased nearly $738 million in houses and condominiums in Sonoma County, according to The Press Democrat’s monthly housing report, compiled by Pacific Union International senior vice president Rick Laws.
The previous record for November and December was $659 million, set in 2005 in the midst of a national housing bubble.
After the October fires, “our market just did a right-angle turn,” Laws said Tuesday. “It’s a different landscape literally and figuratively.”
For the year, buyers spent $3.97 billion on houses and condos, a 10.2 percent increase from 2016. When not adjusting for inflation, only 2005 produced a higher total, a record $4.41 billion that became a high water mark before a national housing crisis sent prices tumbling a few years later.
For the past five years, the county’s housing market has been marked by rising prices and stable or declining sales. Real estate agents consistently have called it a seller’s market, with relatively few homes available given the number of buyers making offers. But wildfires in October scorched more than 5,100 homes and claimed 24 lives in Sonoma County. Brokers are still trying to understand how the fires changed the market.
For November and December, Laws simultaneously reported a spike in new listings and a drop in inventory. There were increased sales and rising prices.
Many properties that had seemed “overpriced” before the flames were snapped up in November by those desperately seeking a place to live, said Pat Provost, one of four owners of Century 21 NorthBay Alliance in Santa Rosa.
“After the fire, they bought everything,” Provost said of buyers.
The number of both completed sales and new listings rose to the highest level for November and December since 2005. But the number of available homes on the market took a downturn after the fire.
December ended with fewer than 390 single-family homes for sale, a decline of 20 percent from a year earlier.
Gerrett Snedaker, a partner in Better Homes and Gardens/Wine Country Group in Sonoma, said the total inventory of houses and condos in December was the lowest for any month in the past 15 years.
“We just continue to get squeezed,” he said.
The median price for a single-family home reached a record $669,500 in December, an increase of 14.4 percent from a year earlier.
Before the housing crash, the monthly median hit a high of $619,000 in August 2005 and later plunged to a low of $305,000 in February 2009. Countywide, sales of single-family homes rose to 4,724 for the full year, an increase of 1.1 percent.
An exception was west Petaluma, where home sales jumped 12 percent to 287 single-family homes.
It was the largest percentage gain for any community in the county.
West Petaluma’s median single-family home price last year rose 3 percent to $780,000. That is higher than the county annual median price for 2017 of $630,000. But agents said west Petaluma continues to attract people who are also considering home purchases in Marin County and the Peninsula, where median prices are more than $1.2 million.
“If you compare this area to some of those others, it’s just incredibly affordable,” said Tony Parrish, an agent with Pacific Union.
Jeremy King, an agent with Coldwell Banker, said the rise in home sales “just shows that strong desire for people to live on the west side of Petaluma. And they’ll pay for it. And they’ll pay more for it.”
One of King’s clients, Marisa Goldstein, recently sold a Sunnyslope Court home in west Petaluma for $1.47 million and now is looking to downsize to a smaller house on the same side of the city.
“There are a lot of people willing to sell their homes to capture (the gains in) the market,” said Goldstein, a wealth manager for Morgan Stanley in Napa. However, in her search as a buyer this winter she has found “a very underwhelming market and very overpriced.”
Looking forward, brokers said one new factor for the market in 2018 will be how many fire survivors choose to sell their burned lots rather than rebuild.
“I think there are still a lot of people unsure what is the best thing for them to do,” said Glenn Gephart, who with Provost is an owner and also general manager of Century 21 NorthBay Alliance in Santa Rosa.
Most of those sold lots are expected to eventually be resold with newly built “spec” homes on them, meaning houses offered for sale by speculators.
You can reach Staff Writer Robert Digitale at 707-521-5285 or firstname.lastname@example.org. On Twitter @rdigit.