Half of single-family home sales in Santa Rosa-Petaluma area during pandemic went for more than asking price

As the North Bay housing market has exploded during the pandemic, over half of single-family homes sold in the Santa Rosa-Petaluma area have gone for over the asking price, according to a new report.

A study by Porch Group, a website for finding home insurance and other services, reported 53% of home sales in the region between January 2020 and September 2021 went above the listing price. That’s compared to 48.5% nationwide.

Pre-pandemic, at most only around a quarter of homes went above asking during peak summer home-buying months.

Of all mid-size metro areas nationwide, Santa Rosa-Petaluma ranked 26th in the percentage of homes sold above asking price, according to the report. California cities including Stockton (ranked first at 71%), Modesto (ranked fourth at 68%) and Vallejo (ranked fifth at 67%) rounded out the top of the list.

In Sonoma County, the median sales price for single-family homes in October was $750,000, according to data compiled by Jim Michaelsen, a sales manager Compass Real Estate in Santa Rosa and Petaluma. While prices dipped slightly from the previous month, that’s still a 5% increase compared to the same month last year.

Compared to September 2019, prior to the pandemic, the county’s median home price has rocketed up by nearly $100,000, or 15%, from $652,698.

The surge in prices is thanks in large part to a rush of pandemic homebuyers pouring into Sonoma County from urban centers like San Francisco, Silicon Valley and beyond.

Starting last spring, it’s not been uncommon for homes to go for more than six figures over the asking price, Michaelsen said. That’s fundamentally shifted how real estate agents have had to navigate the market.

“You really have to pay attention to what's currently on the market with homes that you're competing with when you're taking a listing,” Michaelsen said. “Because all of a sudden, something that sold a month ago, may or may not be the right price for a listing today.”

In Sonoma County, a dearth of properties coming on the market — the region continues to rebuild after losing roughly 6,000 homes in wildfires since 2017 — has only exacerbated price increases.

Of the number of homes lost, only about half have been rebuilt. And housing construction slowed this year as the cost of building materials has spiked and global supply chains have been disrupted.

Although local home prices have begun to soften heading into the winter months, Michaelsen said he’s still seeing strong demand for single-family houses.

“We're still seeing multiple offers on them,” he said. “There's a lot of competition out there, and there's a lot of competition from cash buyers.”

You can reach Staff Writer Ethan Varian at ethan.varian@pressdemocrat.com or 707-521-5412. On Twitter @ethanvarian