Top 10 Sonoma County business stories in 2021
We greeted 2021 in the throes of a major uptick of coronavirus cases in which many local retailers were forced to revert to a grab-and-go business model and a wide swath of employees continued to work from home.
Twelve months later, 2021 is ending with fears over a new variant that is much more transmissible.
But for the most part, 2021 was a year when the local economy rebounded from the depths of COVID-19, thanks to an aggressive vaccination effort that mitigated the pandemic along with stimulus dollars from federal and state sources.
Things aren’t completely back to normal. But there were bright spots: Unemployment dropped. Tourists returned. Customers went shopping. And notable businesses implemented growth plans.
The regional economy also was boosted with no significant wildfires nor smoke in Sonoma County that resulted in poor air quality.
Here are Sonoma County's top 10 business stories for 2021:
1. Economy gets back to near normal. The bounce the regional economy took this year is most starkly seen through the declining jobless rate in Sonoma County.
In January, the level was at 7.1% and by November it had dropped to 3.7%, near the mark before the health crisis. Even with the progress, civilian employment in the county stood at 247,600 workers in November, which was about 8,000 jobs below the start of the pandemic.
The restaurant industry and government still lag on job loss while construction and manufacturing have rebounded, said Sonoma State University economist Robert Eyler.
Construction will grow even more in future years with a continued need to build more residential housing along with passage of the federal infrastructure bill. In that legislations, California will receive more than $25 billion for highways, $4.2 billion for bridges and $9.4 billion for public transportation.
Local businesses also celebrated the fact the county avoided major wildfires in the region. That especially impacts the tourist sector that is a major driver of the Sonoma County economy. PG&E also had very limited preemptive power shut-offs that in the past has inconvenienced its local customers.
2. Home prices continue to climb. Summer 2020 marked the latest boom in the Sonoma County home market, but 2021 may have been the year a ‘new normal’ for home buying set in.
Historic high home prices this year continued to be driven by buyers from San Francisco, Silicon Valley and beyond pouring into the North Bay. And the lack of properties for sale as the region continued to rebuild the roughly 6,000 homes wiped out in wildfires since 2017 only put more pressure on real estate values.
In June 2021, the median sale price of a single-family home in the county reached an all-time high of $825,000. Prices have softened since — to $775,000 in November — but remain around 15% higher than pre-pandemic.
Local real estate agents say even though the intense competition for homes began to subside in the second half of 2021, they expect higher prices for the foreseeable future. That’s because with the shift to remote work appearing permanent, Sonoma County could remain a viable option for buyers who may otherwise not have considered leaving urban centers in the Bay Area and the rest of California.
The influx has raised concerns about the region’s already existing housing shortage — and whether middle-class families in the county will ever be able to afford to buy homes.
But anyone counting on a local housing bubble on the verge of bursting shouldn’t get their hopes up, local real estate agents and economists say. Unlike the risky lending that fueled the speculative boom in 2007, today’s hot market is mainly the result of simple supply and demand.
“I think we’re going to be cruising at this altitude for the next two to three years,” Sonoma State University’s Eyler told The Press Democrat in October.
3. Wine industry consolidation ramps up: The North Coast wine industry resembled a Monopoly board game this year with major and mid-size wine companies trying to get bigger to gain more market share.
The biggest deal occurred in early 2021 when E. & J. Gallo Winery finished its $810 million mega-deal with Constellation Brands Inc. Gallo, the nation’s largest wine company, acquired such budget brands as Clos du Bois and Ravenswood.
That transaction set in motion more mergers and acquisitions. In the spring, the Duckhorn Portfolio of St. Helena and Vintage Wine Estates of Santa Rosa announced they would become publicly traded companies to finance additional acquisitions.
In July, Napa-based Delicato Family Wines bought the Francis Ford Coppola Winery of Geyserville as the fifth-largest wine company in the country wanted to grow its premium portfolio.