Author: Pam Buda

Mid-Price Range Real Estate Trends in Sonoma County for 2008

My last post this week detailed real estate supply, demand and price trends for Sonoma County real estate.  The story of last year was bargain basement pricing by the banks looking to clear their inventory of foreclosed homes.  County-wide the median price dropped 30% year over year through December 2008.  The bulk of the sales action was in the sub-$500,000 price range and really lower than that. It is possible to find single family homes under $300,000 and even under $200,000 in some cases.  With conforming loan rates ducking under 5% for thirty year fixed rate loans, first time buyers and investors are snatching up properties at a record pace.  Condominium sales are just as hot. Meanwhile, let's take a look at homes in the mid-range tier of pricing, between $500,000 and $1 million dollars.  In this range currently you will start to see larger homes, possibly with acreage in communities all over Sonoma County such as Santa Rosa, Sonoma, Glen Ellen, Healdsburg, Sebastopol and Petaluma.    The bulk of the lower priced properties are concentrated along the 101 corridor in Santa Rosa (primarily west of 101) , east Petaluma, Rohnert Park/Cotati and Windsor.  It is not safe to over generalize about communities if you are looking for property however as we have a wide variation of homes and locales. Here is a view of supply and demand for Sonoma County homes priced between $500,000 and $1 million dollars.  The first chart shows the change, or lack of change, in median price over the course of 2008.  Median price rose a modest 2.5% in this price range. The reason prices did not drop drastically in this price range was that the supply of new homes dwindled at the same rate as the number of sales, as sellers who did not need to sell retreated. The rate of sales and new listings were cut in half year over year. There was also a recalibration of pricing above a million and below $500K as properties sought new levels. Clearly there has been a less dramatic softening in prices but the median was left essentially unchanged.  There was a slight increase in sales at the end of the year and a leveling of new listings coming on the market.  What do you think this information means for the spring market?...

2008 Sonoma County Real Estate: Three Quick Sales Trends

These three graphs tell the quick story of pricing, supply and demand trends for housing in Sonoma County from December 2007 through 2008.  But the real story for your home depends on the price range for your house and the part of the county in which you live, or seek to live.  You cannot automatically say that every home in the country dropped 30%.  The price dropped most steeply in those communities with high rates of distressed housing:  West Santa Rosa, East Petaluma, Windsor and Rohnert Park/Cotati. But, on average, and in summary: The median price dropped 30% year over year. The number of newly ratified sales contracts grew steadily all year and lead to a 184% increase year over year. Months supply of inventory dropped dramatically (73%) and steadily all year, exceeding the drop in prices.  From a very strong buyers market in December '07, with over 14 months supply of homes at last December's sales rate, this December saw only 3.7 months supply.  Six months is considered a balanced market.  Anything under is a seller's market--in this case the banks who own nearly half the properties sold. ...

Sonoma County Real Estate Pending Sales up 96% versus December 2006

There was no seasonal dip in newly opened escrows this December as brave (or desperate) buyers and investors sought a home for their cash, literally. Despite the horrendous news in the financial markets, the rate of sales actually increased and the number of new listings continued to decline over the most recent months. Maybe the 2 point drop in interest rates over the last three months has continued to spur buyer activity, and not just at the low end of the market (under $500K--or really under $350K). I just got my hands on all sorts of juicy data and four major price points so you will hear more from me as I analyze the results. The steadily increasing sales continues a trend lead by low-priced REO properties we first noted in February and March of 2008. Meanwhile, here is the quick overview. (Thanks to my broker, Rick Laws, of Coldwell Banker, who is a data geek. He pulls Sonoma County real estate sales data from the local multiple listings service (BAREIS) via the Brokermetrics service.) Since December 2006: Pending Sales are up 96% Closed Sales up 7% New Listings up 48% Take a look at the trend lines over two years, because that tells a partial story of our market in Sonoma County real estate. More to come. Stay tuned. ...

Maps and Craigslist: an interesting Real Estate Mash-up

Mashup is one of those great Web 2.0 terms which sounds intriguing, and is derived from the music industry. It means a hybridized application which includes data of different types from different sources.  I sometimes use it to apply to my improvisational cooking techniques but that is another topic! Today’s real estate professional can take a service from one Web site and pair it with the data from another site, creating a hybrid Web application whose value surpasses the original components. Web designers call this form of content publishing a "mashup," borrowing a music industry term referring to songs containing parts of other songs. Today’s real estate mashups often include maps, listings, and community news. Realtor Magazine One of my new year's resolutions is to overhaul this blog and to add some new functionality. The rainy winter months should provide some time for me to take a look at my technology tools as I go into my third year of blogging. A recent article in Realtor Magazine drew my attention to a neat mashup of Google Maps (one of the most popularly mashed applications) with Craigslist. It is called HousingMaps.com and it offers a map based interface for searching Craigslist ads. I am currently evaluating map-based tools so that I can offer my clients the ability to use the map interface to search the MLS, but this is a handy tool for getting started and would be really useful for rentals. Let me know what you think! and Happy New Year! ...

Wine Country and Snow (and Horses)

Good friend and photographer Robbin Satterlee was able to capture a range of photos from the Sonoma County Wine and Horse country outside Santa Rosa, with dramatic views of snow covered Mt. Saint Helena in Napa and towards the mountainous Geysers of Lake County to the north. Vineyards, horses and snow covered mountains. Not bad. The snow has melted now as warmer rains have come in but enjoy. We have these snowstorms at the higher elevations (1500 to 2000 feet) a couple of times each winter. Snow on hilltops ...

November 2008 Sonoma County Real Estate Sales still cooking

Given the short month, the holiday season and oh yes, the economic meltdown in the news, real estate sales are holding steady as viewed at the end of November, 2008 in Sonoma County California. I will have more detailed information by price points later in the month but here is a quick tidbit of post-Thanksgiving real estate stats. The number of units sold will increase with the final report since there is a several day lag on sales closed at the end of each month while the reporting catches up. This information is provided by Rick Laws, my broker at Coldwell Banker Santa Rosa, and is based upon sales reported via the MLS here by Brokermetrics.                                      Nov 07         Nov 08          #Units Change          Percent Change Under Contract          206              455                   249                     120.9 % Sold                               242             320                   78                        32.2 % New Listings                474              370                 -104                    -21.9 % First thing that jumps out is that there were 120.9 % MORE brave souls who wrote offers on properties in this wild short month of November versus last year at this time.  The number of closed sales is up at least 32 % year to year as well.   The number of new listings has declined nearly 22 % versus last November, as many people hunker down.  This makes for some interesting trend lines year over year, as well as expected seasonal declines in units sold as we head into the winter months.   Anecdotally, the buyers are split about evenly between investors and first-time home buyers.  Units sold are dominated by the low-end of our market, under $400,000.  Since the one point drop in mortgage rates just before Thanksgiving really was not much of a factor in November's sales, it will be interesting to see how that boosts (or not) our  real estate sales for Sonoma County in December.   Stay tuned....

Months Supply of Sonoma County Entry Level Real Estate Declines Sharply

One of the most interesting measures of the tension between buyers and sellers in a real estate market is the "Months Supply of Inventory" figure. What this number tells us is the number of months it would take to sell the existing number of homes for sale at the present rate of closed sales. Buyers Market or Sellers Market? Generally six months of inventory is considered to be a market balanced between buyers and sellers. Anything less, and sellers are advantaged in negotiations. Anything more, and the trend favors buyers. Two years ago in Sonoma county, there were 6.2 months of entry level inventory for sale. When the first wave of foreclosed properties began hitting our market in force in 2007, the inventory piled up to a high point that so few properties were selling, as many more were coming on the market. Consequently, MSI (Months Supply of Inventory) ballooned to a 14.8 months supply, a strongly favored buyers market. Early in 2008, banks began slashing prices and buyers have been increasingly active ever since. (See my posts under market updates beginning in March to track this trend.) The lower priced properties, driven by foreclosures, have steadily been absorbed by first time buyers and investors. They have been gobbling up REO's so quickly that now there are only 2.7 months of inventory available at the current rate of new listings and sales, a strongly favored sellers market. If you are a buyer interested in purchasing an REO home, it is important for buyers to be prepared for the market realities especially for the most solid homes in the best locations. 1. You must have a STRONG pre-approval. In many cases first time buyers will be competing with all cash investors for the same properties. 2. You may need to make multiple offers on a stream of properties before you land the right one. 3. It ALL DEPENDS. Make sure you have a committed working relationship with a realtor who is knowledgeable about the changing market, and who knows how to present and negotiate your offer(s) in the best light. Just as sellers have learned (in some cases!) to be realistic, it is important for buyers to do the same. Happy hunting! ...

Sonoma County Real Estate Market Dynamics through October 2008

At first glance the overall supply and demand trends for Sonoma County real estate from October 2006 through October 2008 show gentle trend lines that belie the turbulence of our market. The number of units for sale (all residential types and all price ranges) is down modestly (3.9%) from 3284 units then to 3155 units now. The peak was 3608 units for sale in August 2007 with some seasonal trending over the 25 months. The number of units sold has increased by a robust 33% however, to 508 units from 381 units in October 2007. Days on market for properties in contract has declined from 93 days (peak 112 in January 2007) and the number of properties under contract has grown significantly from 372 to 553. The number of pending Sonoma County home sales is the highest in 4 years. Last year at this time, pending sales were hovering between 166 and 286 units per month! Now they are running 450 to 550. The reason for the change? Banks got aggressive and drastically lowered the list prices of bank-owned (REO) properties creating lots of competitive, interested buyers. The true story behind any particular home investment is driven by intensely local conditions rather than broad average trends: single family home, country property, vineyard property, fixer or condo. It is absolutely a function of price point with the bulk of the activity under $500,000. The following graph shows the same trend lines as above(active inventory versus sold listings) for all residential Sonoma County sales under $500,000.  Since the median home price was nearly $600,000 at the market peak in 2005-2006, very little was available under $500K. Since then, it has declined county wide on average jut over 30%--there's that word again, on average.    While the overall number homes for sale has declined slightly since October 2006, under $500,000. it has nearly doubled.  The number of units sold in this price range has increased nearly 200% in the last 25 months.  Bottom line is the banks figured out pretty quickly how to move REO inventory and both investors and first time buyers are competing for the best of these homes.  Result--inventory is declining faster than it is coming on the market and overall sales velocity has increased, all fueled by the REO bargains.  ...

Camels and Dressage?

OK I really am working on a more serious post about the 4 year high in home sales we experienced in Sonoma County real estate for the month of October 2008, with plunging inventory, but first this fun video for my horse (and camel) friends, from @WalkingHorse, a Twitter friend. ...

Smart Voters finally approve SMART Train for Sonoma and Marin Counties

At long last both Marin County and Sonoma County voters have approved a 1/2 cent increase in the county sales tax to fund the development of the SMART train which will run on already existing train tracks from Cloverdale in North Sonoma County to Larkspur in Central Marin county, where it will be easy to connect via bus or ferry to San Francisco's financial district. Imagine a North Bay with a transportation network of buses, shuttles, ferries, trollies, bike paths and sidewalks all connected with a centralized rail line that makes it possible to easily travel around Marin and Sonoma counties without ever getting behind the wheel of a car. It’s hard to envision such a network in 2008, when driving on Highway 101 is virtually the sole alternative for travel between the two counties. But the public already owns an asset capable of changing that reality. The Sonoma-Marin Area Rail Transit District – SMART – proposes a 70-mile passenger railroad and parallel bicycle-pedestrian path along the publicly owned Northwestern Pacific Railroad right of way through the two counties. The rail line runs from Cloverdale, at the north end of Sonoma County, to Larkspur, where the Golden Gate Ferry connects Marin County with San Francisco. Along the way SMART will have stations at the major population and job centers of the North Bay: San Rafael, Novato, Petaluma, Cotati, Rohnert Park, Santa Rosa, Windsor and Healdsburg. For a cool video view of a similar system in San Diego click here....

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