Economists outline future of Sonoma County housing market

Sonoma County’s future could involve fewer surges in new home construction and more debates about rent control and living wages.

That was one of the messages given Thursday by two economists speaking to county real estate agents and brokers in Santa Rosa.

California Association of Realtors chief economist Leslie Appleton-Young and Sonoma State University economics professor Robert Eyler painted a mixed picture of the regional and national economy at a workshop for the North Bay Association of Realtors.

The good news is the Bay Area is “the growth engine of California and of the United States, to a certain extent,” Eyler said. Also, there aren’t signs of recession in the outlook for the next few years, he said.

However, the recovery since the last recession has been tepid, and economic growth could slow to a level that, while positive, feels “like walking in mud,” he said.

The housing market today is driven more by those with wealth than those whose wages allow them to purchase homes, he said. And since the downturn, most of the residential construction in California has been urban multi-family developments, not suburban single-family homes.

“I would not expect a renaissance of home building in this county any time soon,” Eyler said.

He noted that Santa Rosa City Council members are considering rent control and that Napa County officials are contemplating a hike in the county’s minimum wage. Should advocates of a so-called “living wage” succeed in Napa, the pressure would increase for change in Sonoma County, he said.

The county’s most likely opportunities for new jobs lie in the life sciences and service sectors, he said.

Appleton-Young agreed that San Francisco and Silicon Valley are proving a major growth engine for California. She forecast that real disposable income for the state will rise 4.5 percent next year, compared to 2.7 percent nationally.

“This is the Bay Area,” she said in explaining such growth. “This is happening right below you.”

Appleton-Young called it a seller’s market in housing today. But she noted that prices flattened this summer, homes are staying on the market longer and, looking ahead, “there’s going to be a little more power on the buyers’ side.”

Real estate experts historically have said Californians typically own a home for seven years before selling. But the association’s annual survey this year found agents reporting that sellers had owned the average home for 10 years.

“That’s the highest we’ve recorded in 35 years,” Appleton-Young said.

You can reach Staff Writer Robert Digitale at 521-5285 or robert.digitale@pressdemocrat.com. On Twitter @rdigit