Sonoma County home sales decline 10 percent in August as market slows
Buyers and sellers seem to think Sonoma County home prices finally have peaked, after doubling the past seven years.
Sellers are putting more homes on the market this year, thinking prices won’t get better anytime soon, real estate agents and brokers said Monday. The new listings have ballooned the inventory of houses for sale in August to the most since 2011 and meant more choices for wary buyers, who are increasingly cautious about overpaying for a property. It all appears to indicate the county’s housing market is slowing.
“The word out there is we’re starting to go down a little bit,” Berkshire Hathaway HomeServices agent Ingrid Mathews said of home prices. As a result, buyers are “so skeptical.”
They bought 471 single-family homes in the county in August, a decline of nearly 10 percent from a year earlier, according to The Press Democrat’s monthly housing report compiled by Pacific Union International senior vice president Rick Laws.
Despite the double-digit monthly decrease in sales, on a year-to-date basis since January they have dropped only 2 percent.
“The beat goes on,” said Laws, “but overpriced homes are not selling.”
Buyers are making fewer offers, too, he said.
As a result, more sellers are cutting prices, something rare here in recent years.
Fresh home listings have increased 8 percent since the beginning of 2018. The increase has led to the largest inventory of homes on the market since 2011. The month of August ended with 1,138 single-family homes for sale, an increase of 36 percent from a year earlier.
Glenn Gephart, an owner and general manager of Century 21 NorthBay Alliance in Santa Rosa, said another sign of the market’s slowdown is houses are taking longer to sell.
Sixty percent of the available single-family homes in Santa Rosa have been on the market for more than a month, he said. Historically that would be typical, he said, but he called it “certainly unusual” for a housing market that in recent years has featured a tight inventory and strong demand.
County home prices have tumbled and soared over the past decade as the housing market weathered the historic stock market crash on Wall Street and the most destructive wildfires in state history. The October 2017 fires claimed 24 lives and burned nearly 5,300 homes in the county.
In August, the median single-family home sales price rose slightly from a month earlier to $665,000, and an increase of 7 percent from a year ago. The median sales price has more than doubled since August 2011, when it was $330,000. In June, the county posted a record high median price tag of $700,000.
Most brokers and agents continue to characterize residential real estate as a seller’s market. They say even with increase of homes listed for sale, the available inventory amounts to slightly more than a two-month supply at the current sales pace. A balanced market would have a supply of three to six months.
Today, potential sellers are hearing about more price reductions, agents said, and many of them are wondering whether the pricing downturn will last during the next few years.
Pat Provost, another Century 21 owner, said many sellers have concluded, “If we’re going to sell, we should sell now.”
The market shift appears to be happening statewide, with August home sales declining nearly 7 percent overall from a year earlier, according to the California Association of Realtors.
“Buyers are being cautious and reluctant to make a commitment as they are concerned that home prices may have peaked and instead are waiting until there’s more clarity in the market,” the state Realtors group President Steve White said in a statement.
The shifting housing market conditions mean agents are going to have to do more marketing in order to attract buyers, said Gerrett Snedaker, senior vice president for the North Bay division of Wine Country Group by Better Homes and Gardens. Sellers also may need to change their mindset regarding pricing.
For most of the past six years, Sonoma County sellers have looked at comparable home sales and then sought even more money for their own properties. But Snedaker said agents soon may recommend “pricing slightly below the last price that sold. And sellers are not keen to do that.”
Alanna Krinard, sales manager for Century 21, said the housing market shift is helping certain buyers. She acknowledged only a small slice of county residents could afford today’s median-priced home. But the further decline in prices may provide a chance for some prospects to become homeowners.
“It’s an opportunity for them to get in where maybe they couldn’t before,” she said.
You can reach Staff Writer Robert Digitale at 707-521-5285. On Twitter @rdigit.