Record high Sonoma County home prices, rents put new squeeze on residents

A mix of historic-low mortgage rates, surging inflation and a rush of wealthier home buyers from urban centers have pushed up average rent 16% and the median home price 34% over the past two years.|

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After about six months in Los Angeles, Madelyn Swanson decided she’d had enough of Southern California and made plans last fall to move back home to Sonoma County.

She soon landed a job at a local lighting design and manufacturing company, where she plans to start next month. But upon looking for an apartment, Swanson, who grew up in Petaluma and Rohnert Park, discovered rents have skyrocketed since she last lived in the area in 2018 as a Santa Rosa Junior College student.

Even with a relatively good-paying job, Swanson, 23, said she’ll likely need to settle for a $1,300-a-month room in a shared house to ensure she can still make her car and health insurance payments.

“Sonoma County is home, but it’s like, can I afford to be home?” she said.

Throughout the pandemic, soaring local rents and home prices — which both hit record highs in April — have forced renters and buyers to make similar choices and compromises. And despite signs the local home real estate market could be approaching its peak, experts say Sonoma County residents shouldn’t expect housing costs to come back to earth any time soon.

Those growing costs, even in the face of mounting uncertainty across the broader economy, have only increased concerns about whether many low-income workers, middle-class families and young professionals can comfortably afford to live in Sonoma County.

“(Rising housing costs) can change the way our communities work, and who works here,” said Sonoma State University economist Robert Eyler.

Sonoma County’s median apartment rental price hit a record $1,964 in April, a 16% increase from April 2020, a month after the pandemic took hold, according to rental website Apartment List.

Median single-family home prices in the county, meanwhile, reached an all-time high of $870,500, a 16% spike from a year ago — and a staggering 34% increase since April 2020, according to data from local Compass sales manager Jim Michaelsen.

Local housing experts have pointed to a mix of historic-low mortgage rates, surging inflation and a rush of wealthier home buyers fleeing urban centers for pushing up rents and home prices over the past two years. Those pressures have only exacerbated the county’s long-standing affordable housing shortage as it continues to rebuild the roughly 6,000 homes lost to wildfires since 2017.

In recent months, rising borrowing costs and erratic financial markets along with persistent inflation and global supply chain issues have raised the prospect of an impending economic downturn. But Eyler, the Sonoma State economist, said such concerns don’t mean the local housing and rental markets are on the verge of collapse.

Eyler said the main reason is simple: After decades of sluggish housing construction, there aren’t nearly enough homes for all of those looking for new places to live in Sonoma County.

“Unless there’s new supply or a real shift in demand, there's not going to be a real change in the market,” he said.

Still, Eyler and local real estate professionals said that when it comes to single-family home prices at least, a “slowdown” could be on the horizon. That’s because recent interest rate hikes by the Federal Reserve to curb inflation have sent average mortgage rates climbing from around 3% to above 5%, meaning the cost of a new home loan has become more expensive.

If interest rates continue to rise over the coming months as expected, Eyler said, economic forecasts should show home prices leveling by early next year.

Already, the higher rates have cooled the frenzied competition among home buyers seen earlier in the pandemic, said Erika Rendino, owner of RE/MAX Marketplace in Cotati. Even so, there are still plenty of buyers placing bids to keep prices high.

“This is an opportunity to get in with less competition,” Rendino said. “It’s not an opportunity to put low offers on properties that will most likely go for the asking price.”

Michaelsen with Compass said that even if higher interest rates have caused some buyers to exit the market, the extremely low number of homes for sale in the county is helping keep prices high. In April, there were just 869 homes on the market in the county, compared to 1,177 the same month a year prior.

Michaelsen added that affluent home buyers from tech hubs like San Francisco and Silicon Valley — some snapping up new vacation homes — generally aren’t too concerned about increasing mortgage costs.

“All of these people with cash (bids) don’t care one way or another,” Michaelsen said.

Sonoma County Median Home and Rental Prices

Median Single-family Home Prices:

April 2022: $870,500

April 2021: $750,000

April 2020: $650,000

April 2019: $645,000

Median Apartment Prices:

April 2022: $1,964 a month

April 2021: $1,705 a month

April 2020: $1,692 a month

​​April 2019: $1,719 a month

Sources: Jim Michaelsen, Compass real estate brokerage in Petaluma and Apartment List

But for buyers without vested stock options, the rising interest rates can make all the difference.

Jessica Brown and her family recently moved into an RV in her parents’ backyard in Santa Rosa after selling their home in Tennessee about two years ago. Brown, who works as a driver for the delivery service Shipt, and her husband, a construction manager, started looking for a home to purchase in Sonoma County earlier this year.

But when mortgage rates started to climb in March, the couple found they no longer qualified for the federally backed home loans for which they’d planned to apply.

“It’s like this crazy number game you're playing every day as interest rates rise,” Brown said.

Brown, who was raised in Santa Rosa, remains optimistic the couple and their 3-year-old daughter will find a home in the $500,000 price range. She said the family has started looking in west county where real estate is less expensive. But moving there would add 30 minutes to her commute.

“It’s just not an ideal location, but if you want to buy a home in your ideal location, the options are just so scarce,” she said.

Moving out to move in

For those who can’t afford to buy, rising rents could mean moving to even more far-flung parts of the region.

Calum Weeks, policy director with the local pro-housing group Generation Housing, said the lack of affordable housing near job centers harms low-income service and agricultural workers, who are sometimes forced to live outside of the county, and hampers efforts to cut back climate-harming emissions from vehicle commutes.

“We have to be really mindful about the number of low-wage jobs and the availability of affordable housing,” Weeks said.

Weeks and Generation Housing are advocating for local governments to relax zoning restrictions and building requirements to make it easier to create homes that low-income workers can actually afford.

A recent report by the group found that at least half of low-income renters in the county spend over 30% of their income on housing, meaning they’re considered “rent burdened” by federal standards. Local Black and Latino renters experience disproportionate rates of rent burden, the report found.

The pandemic rental price surge in Sonoma County took off in the middle of last year, around the same time that inflation began tightening its grip on the U.S. economy. The recent rent increases came despite a statewide rent control measure that went into effect in 2020 capping rent increases for many units between 5% and 10% a year. A more restrictive state price-gouging order that prohibited most landlords from raising rents by more than 10% dating back to the 2017 North Bay fires expired at the end of last year, though it’s unclear how closely the order was enforced.

Swanson, the recent college grad coming home to Sonoma County, isn’t sure she’ll be able to stay in the region long term if housing costs don’t come down. She plans to get her law degree in the coming years and is considering applying to schools out of state so she can save on rent to help pay her student loans.

She hopes to buy a home in the county some day, but like so many young adults who grew up in the North Bay, she’s unsure if she’ll ever be able to afford it.

“It’s something that I want to do and am aspiring to do, but I don’t really know what the future holds for me and what my options are,” she said.

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

North Bay Q&A

The Press Democrat fields a range of questions about the housing market from local readers, and this story is a prime example.

Whether you're a longtime resident or a recent transplant, there's probably something you've wondered about this place we call home.

Have something on your mind? A topic you want us to explore? Visit to pose your question.

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