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December 2011 - Wine Country Market Analysis

Sonoma County Trends: The inventory of homes and condominiums for sale (1,193) in Sonoma County at the end of December was 40.2% lower than last year (1,995) and 20% lower than the supply last month (1,491).  This is the lowest level of inventory of available homes in the County since April of 2005, over six years ago.  New sales in November (554) were 61% ahead of the pace in December 2010 (341) and they were 6.1% ahead of the pace of last month (522).  There is only a 2.2 months supply of inventory based on the current sales pace – a continuing indication of a trend towards a “seller’s” market.  The median price of homes closed in December in Sonoma County was $300,000 and was 4.8% below the median price of homes sold a year ago, $315,000 but it was consistent with the median price over the past ten months.   Distressed properties (bank-owned, short sale or foreclosure) make up 32% of the available inventory, 67% of new sales and 51% of closings for the month.  There is only a 1 months supply of distressed properties available based on the current sales pace.  This is the lowest level of distressed inventory since June of 2007 when the inventory stood at 295 units.  A year before that, June of 2006, there were just 9 foreclosures in the County.  We don’t expect the supply of distressed properties to fall as quickly as they rose in 2006 and we expect them to influence the market through the next couple of years.
Interestingly, between January 2006 and January 2012, 24,758 homes sold in Sonoma County.  11,238 of them (45%) were distressed properties – two-thirds REOs and one-third short sales.  Certainly, this ratio should be reduced moving into the future.

Healdsburg Trends: The inventory of homes and condominiums for sale (71) in Healdsburg at the end of December was down 24% from that of last year (93) and was down 27% from last month (97).  New sales (19) were up 36% from the 14 new sales in December 2010 and up 58% from the 12 sales last month.  Only 10% of the inventory in Healdsburg consists of “distressed properties” (bank-owned, short sale or foreclosure), but 42% of the new sales were distressed properties and 20% of the closings were distressed properties.  There is a 3.7 months supply of inventory based on the overall inventory and sales pace, and only a one month supply of inventory based on the inventory and sales pace of distressed properties.  This shows the discretionary nature of the Healdsburg market that is similar, in this respect, to the Up Valley market in Napa County.

Sonoma Valley Trends: The inventory of homes and condominiums for sale (153) at the end of December in the Sonoma Valley (Sonoma, Glen Ellen and Kenwood) was down 20% from the month of December 2010 (192).  It was 12% lower than that of a month ago (174).  This is the lowest level of inventory since May 2005. There were 41 new sales for the month that is 21% higher than that of a year ago (34) and slightly ahead of that of last month (39).  There is currently a 3.7 months supply of inventory based on the current sales pace.  The median price of the homes closed (41) in the Valley in December was $400,000. This is 2% higher than $392,000 a year ago.  This number is jumping around quite a bit based on whether there are substantial high-end closings in a particular month.  Distressed properties (bank-owned, short sale or foreclosure) in the Sonoma Valley in December (30) represent 20% of the inventory, 68% of the new sales and 51% of the closings.  There is only a 1.1 months supply of distressed properties available based on the current sales pace.

If you would like a monthly update of this information, or information on other market areas, please drop me an e-mail at gsned@winecountrygroup.com, 
Gerrett Snedaker, CRB Senior Vice President, North Bay Wine Country Group Realtors