After a strong sales bump in June, Sonoma County’s housing market declined in July to the slowest pace of sales in seven years.
Meanwhile, a combination of appreciation and growing sales of pricier properties last month lifted the median price for a single-family home to a new record high of $644,000.
Buyers purchased 406 single-family homes in July, according to The Press Democrat’s monthly housing report, compiled by Pacific Union International senior vice president Rick Laws. It was the lowest sales total for the month since July 2010.
The results contrasted with June, when 512 homes were sold, the best showing for any month in two years. July sales declined almost 20 percent in one month.
“That’s a pretty precipitous drop,” said Laws. He and other brokers noted that June and July sales together were nearly the same as a year earlier. As such, the results may have been simply a strange concentration of transactions in one month rather than another.
Even as July sales slowed, the median price climbed almost 3 percent from June and surpassed the previous record high of $635,000 set in March. Last month’s median price increased 12 percent from a year earlier and now has risen 111 percent from $305,000 in February 2009, when home values hit bottom in the midst of a national housing crash.
The rise of the median price this year has come as a result of gains in appreciation and because of a change in the mix of homes sold. The county has seen strong growth in the sale of homes priced at $1 million or more, even as fewer starter homes are changing hands.
In July 2012, only 17 county homes sold for more than $1 million. Last month that number rose to 70.
Meanwhile, the number of homes selling for less than $500,000 declined to 77 homes in July from 406 five years ago.
Seven years ago the county was in the midst of a buyer’s market, as waves of foreclosures and other financially distressed homes came up for sale. But as such properties significantly declined in number, the market shifted to the advantage of sellers.
In recent years, buyers have faced competition for a limited supply of homes on the market. July ended with slightly more than 800 homes for sale, about a two-month supply at the current pace of sales.
“That’s why the prices are up,” said Pat Provost, one of four owners of Century 21 NorthBay Alliance in Santa Rosa. “There’s no place for people to go.” Such limited inventory is a factor not only in the county but “all over the country,” she said.
Brokers blamed the limited supply for a decline in county home sales in three of the last four years. To date this year, sales have fallen 3 percent from the same period in 2016.
Typically the lowest-priced homes garner the most offers, said Laws. Nonetheless, “there’s no price point that’s easy for buyers in this market.”
In the search for properties, some buyers are seeking out agents whose clients are making preparations but have yet to list their homes. The buyers then write offers before the properties comes to market, said Lori Sacco, managing broker for Vanguard Properties in Sebastopol.