Home prices jump to record highs after Sonoma County fires
October’s deadly wildfires sent shock waves through Sonoma County’s housing market, simultaneously leading to record high prices, a drop in completed sales and a jump in newly signed deals in the weeks after the disaster.
The median sales price for a single-family home climbed last month to $648,000, according to The Press Democrat’s monthly housing report, compiled by Pacific Union International senior vice president Rick Laws. The median increased nearly 9 percent from a year earlier and surpassed the previous high of $640,000 set in July.
Among a string of other shifts, buyers last month purchased 366 single-family homes, the lowest number for the month in six years. In hard-hit Santa Rosa, only 130 homes sold, the lowest for October in a decade. The lagging results reflected both the loss of properties to fire and delays in closing deals as home insurers, lenders and title companies exercised caution in the aftermath of the most destructive wildfires in U.S. history.
Meanwhile, buyers, including many whose homes burned to the ground, signed contracts in the county for 483 houses, the best results for the month in at least eight years.
And sellers in October pulled 206 properties from the county market, at least double that of any other month this year. Many of those properties had been damaged or destroyed by fire, brokers and agents said. But others were taken off the sales market in order to be rented at premium rates by insurance companies vying to temporarily house burned-out clients.
Vicki Roberts, an agent with Bertolone Realty in Santa Rosa, said she has seen unusual housing markets during her 27 years in real estate “but nothing like this. This is unprecedented.”
It’s too early to know how much the housing market has changed since the firestorms began Oct. 8, eventually killing 23 people and destroying 5,130 homes in the county. The uncertainty is partly because many of the sales contracts signed after the fires remained in escrow at month’s end.
But the loss of so many homes from an already limited housing stock is prompting many buyers and sellers to conclude that property values just reset higher.
“This is a perfect storm in terms of demand for housing and shelter,” Laws said.
Buyers commonly are paying 10 to 15 percent above the listed price for houses, he said. The final sales prices “jumped because there was an intense demand. People were scrambling for shelter.”
The fire is the latest chapter this millennium in a housing market that already had weathered a housing bubble, a foreclosure crisis and a historic slowdown in new home construction.
“We’ve not been in a normalized market in the last 15 years,” said Randy Waller, broker/owner of W Real Estate in Santa Rosa.
During the bubble, the county’s median price set a record high of $619,000 in August 2005 but then plunged to a low of $305,000 in February 2009. Since the market crashed, home prices have risen steadily for five years.
In recent times, the biggest complaint of both agents and buyers has involved the lack of available homes for sale, an issue tied partly to historically low levels of new home construction.