Sonoma County housing market off to a slow start this year

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Sonoma County’s housing market is off to another slow start this year.

Buyers purchased 245 single-family homes in February, essentially unchanged from last year, according to The Press Democrat’s monthly housing report, compiled by Pacific Union International senior vice president Rick Laws.

To date this year, buyers have purchased 504 homes. That is a 6 percent increase from last year but still the second-slowest start since 2008, when the housing market was in the midst of a historic crash.

And the number of new listings for January and February is the lowest number in at least seven years, when Laws first began presenting such data.

“For sure, listings were as low as I’ve seen them in a long, long time,” said Brian Connell, managing broker for the Santa Rosa Mission office of Coldwell Banker.

The median sales price for a single-family home last month was $544,000, an increase of nearly 11 percent from a year ago.

Home values here peaked with a median price of $619,000 in August 2005, a record set during a national housing bubble. Next came a crash where prices hit bottom at $305,000 in February 2009.

After a period of uncertainty, home values took off in earnest in the middle of 2012. The median price now has remained higher than a year earlier for 45 consecutive months.

For much of that time, agents and brokers have lamented a lack of available homes for sale. One reason is the decline of economically distressed properties on the market.

In February 2012, the county recorded the sale of 181 properties that had been involved in foreclosures or short sales, the latter a sale for less than the amount owed on the mortgage. For last month, that number was six.

February 2016 ended with fewer than 550 homes available for sale, slightly more than a two-month supply of inventory at the current pace of sales. That is generally considered a sign of a sellers’ market.

The number of listings typically increases each spring, and home sales usually peak in early summer.

Trish McCall, an agent with Keller Williams in Santa Rosa, said in the coming months she expects a number of sellers will list their homes with agents.

“I have a bunch coming,” she said, “so others must as well.”

However, McCall and others said this year’s housing market likely will look similar to that of 2015.

“Until we see more inventory,” Connell said, “it’s just going to be tough for buyers.”

The housing market continues to benefit from historically low interest rates. But the rebound in home values has priced many families out of the market.

Only 26 percent of county households could afford a median-priced home here in the fourth quarter of 2015, according to the California Association of Realtors. That compares with 29 percent at the end of 2014.

Laws of Pacific Union predicted the lack of income growth for many households will constrain the amount that prices rise this year.

“I think we’ll see modest appreciation,” he said, “even though there’s no product and huge demand.”

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

EDITOR’S NOTE: Home prices peaked in August 2005. An earlier version of this story contained an incorrect date.

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