Sonoma County median home price hits $555,000, highest in nine years
Sonoma County’s housing market got off to a familiar start in 2016, with a paltry volume of inventory, relatively few sales and a rising median price that last month reached the highest level in nine years.
The county’s median sales price for a single-family home hit $555,000 in January, according to The Press Democrat’s monthly housing report, compiled by Pacific Union International senior vice president Rick Laws.
The median price climbed nearly 16 percent from a year earlier and is the highest for any month since March 2007, when it was $560,000.
The market so far looks a lot like 2015, said Tom Kemper, manager of the Coldwell Banker office on Bicentennial Avenue in Santa Rosa. What’s still lacking is inventory.
“There’s still more people that want to buy than there are houses to buy,” he said.
Buyers last month purchased 255 single-family homes. Home sales increased 12 percent from a year ago, but the total still represented the second-slowest January in eight years.
Craig Curreri, a broker associate with Pacific Union in Santa Rosa, said homes that would have sold a year ago for $450,000 are now getting snapped up for $515,000. And relatively few such properties are on the market.
For buyers in that price range, he said, “it’s brutal. It’s absolutely brutal... The people who are achieving the most success are the ones willing to get uncomfortable.”
For some buyers, getting uncomfortable means selling a current home before finding a replacement. So doing can bring uncertainty about where the buyer will live in the short term, but it also can make a purchase offer more attractive to a seller, Curreri said.
Brenda Alarcon, an agent with Bradley Real Estate in Santa Rosa, said she is encountering current homeowners interested in buying a new property, “but then they don’t want to sell their house until they find something else.”
To improve their chances, such buyers should first place their own houses on the market, Alarcon said. If needed, they can seek a longer escrow period on their current property in order to give them more time to buy their next one.
The county’s median price has mostly rebounded in the aftermath of the national housing crisis.
The median hit a record high of $619,000 in August 2005 before plunging to a low of $305,000 in February 2009.
In the last four years, the median has risen 72 percent and is now just 10 percent below the record high.
The county ended January with fewer than 500 single-family homes on the market, less than a two-month supply of inventory at the current pace of sales. Such a low volume is generally considered a sign of a sellers market.
“The biggest problem is we don’t have anything to sell,” said Pat Provost, one of four owners of Century 21 NorthBay Alliance in Santa Rosa.
January displayed a switch in sales activity by price range.
Sales declined 33 percent compared to a year earlier for single-family homes selling for less than $500,000. For houses that sold at or above $500,000, the number of sales increased 76 percent.
The sales increase of more-expensive homes could be due partly to increased purchases in more-affluent neighborhoods. But Curreri maintained that the increase is also partly due to appreciation.
He gets support for that view from real estate data service CoreLogic, which reported that county homes increased in value an average of 9.5 percent in December from a year earlier, the most recent data available. The CoreLogic Home Price Index is based on sales of the same properties over time.
Provost said 2016 still could end up better than last year for the real estate market. Buyers and sellers may conclude that an election year is the right time to do business because interest rates and the economy likely will remain favorable.
However, she said, better times will require getting a much bigger supply of inventory to sell once the spring home buying season begins.
“If we don’t,” said Provost, “then I think we’re going to stay about the same.”
You can reach Staff Writer Robert Digitale at 521-5285 or firstname.lastname@example.org. On Twitter @rdigit