Sonoma County Real Estate Sales Update
County wide sales trend in Sonoma County don’t tell the whole story about our real estate market, since the lower priced properties ($400,000 and under) are the tail wagging our real estate market dog. (!!) But we have to start somewhere so here you go. (Click on the image for a larger, clearer view.)
Year over year the median Sonoma County home price dropped 5% to $359,000. However, the apparent bottom for this market (whether a V, U or W is yet to be determined) was in February when the median price was $315,000. Some of my smart buyer clients (you know who you are) are happily ensconced in homes they bought in January and February, sensing the (a?) bottom had arrived. We (please forgive a pat on the back here) called it in March. The price increase is being driven by the shortage of entry level listings and multiple offer bidding wars driving what inventory is out there up in price. Prices at the upper ranges ($800,000 and up, particularly over a million dollars) are very soft. Choice properties in choice locations are selling, sometimes with multiple offers in Sebastopol, Healdsburg and Sonoma, but they are the exception rather than the rule.
Inventory has dropped DRAMATICALLY. Is this due to the shadow inventory of foreclosed being held back by the banks? Or is it a reflection of the inventory that piled up before prices began their steepest decline, and the market caught up with reality?
The number or newly opened escrows, or sales marked “Under Contract” where the sale has not yet been completed, has been steadily increasing. (NOTE: Not all of these will close. In fact a large number are falling out of contract. I had heard this week as many as 40% but do not have documentation of that fact. I can tell you that most of the escrows I open for clients DO close but that is another story.)
Many bloggers and real estate writers have written about the decline of unit sales in August, which was unexpected. What does that mean? I am less concerned because the trend of newly under contract sales is steadily growing. Time will tell if that data point reflects a trend, or if it is just an anomaly.