Spotlight on Housing: Young families feeling squeezed out of market

Competition from ‘wealthy retirees’ is dashing all hope, say youthful buyers|

SPOTLIGHT ON HOUSING

Has Sonoma Valley’s “housing crisis” reached a tipping point? Many think so and are calling for action. But action from who, and action as to what? In this third part of our four-part series focused on Sonoma Valley housing needs, Index-Tribune reporter Lorna Sheridan takes a look at the lack of inventory and sky-high prices young families face when trying to purchase a home in Sonoma.

What does $500,000 get you in Sonoma Valley today?

Verde Vista 2-bed, 2-bath house with 988 sq. ft. for $489,000

Sonoma Highway 1-bed, 1-bath house with 824 sq. ft. for $437,000

Park Tree Lane 2-bed, 1-bath condo with 1,054 sq. ft. for $419,000

Bernhard Avenue 2-bed, 2-bath house with 1,120 sq. ft. for $450,000

Broadway 2 bed-2 bath condo with 976 sq. ft. for $419,000

West Spain 3-bed, 2-bath condo with 1,412 sq. ft. for $459,000

Working mom Renee Crocker is expecting her second child. She says she's 'lost all hope' that her family will be able to purchase their own home in Sonoma.

'My husband was born and raised here and we'll never be able to buy,' says Crocker. 'It's very sad. I'm delighted the local economy is doing well, but it's criminal that no one can afford to live here but the rich.'

Amanda Beach, whose husband Shawn grew up in Sonoma, echoes the same sentiment.

'There are so many families like us in Sonoma Valley who are educated and well above the poverty line who are housing insecure,' says Beach. 'It's unreal.'

Realtor Jennifer Powers has been with Sotheby's for more than 17 years. There are less than half as many houses for sale today as there were a decade ago, according to her data, and they are selling nearly twice as quickly as was typical a decade ago.

Most significantly, of the 126 single family properties for sale in Sonoma Valley on July 25, almost all are condos and only a handful are less than $400,000. There are around two dozen properties available under $600,000, and about a quarter of those have an offer pending, according to realtor.com.

The least expensive house for sale in the Valley currently is $351,000, which buys you 768 square feet. The four houses under $400,000 are all less than 1,500 square feet and three are under 1,000 – arguably too small for a family.

'The lower end here for a single family home is $600,000 and that's a fortune to most young families,' says real-estate agent Tracy Reynes of Terra Firma Global Partners.

Adds Powers: 'And they're facing sticker shock when they see what they get for that price.'

Young working couple Holly and Doug Marshall have been having trouble finding a home for $600,000 or less without being outbid. 'We've been looking for a while,' she said. 'On Friday a house was listed for $580,000 and was offered over asking price on the same day.'

Sonoma County was recently named one of the 'top 10' least-affordable places to live in the country. To make the list, published in a study by realty firm RealtyTrac, a region's wages must not have kept pace with home appreciation.

Sonoma County made the list with a current median sales price around $530,000. But if Sonoma County is unaffordable, Sonoma Valley is really unaffordable, with a median house sales price currently of $750,000. One hour away in the Sacramento area, by comparison, the average house price is $293,000.

'I really want to help my clients to get their foot in the door of home ownership but, over and over, we've had to start looking out of town,' says Reynes. 'Almost everywhere else in Sonoma County is much more attainable. It's sad because so many people who work here can't afford to live here. They have to commute.'

For families who are determined to stay in the Valley, Powers said an open mind is crucial, 'whether it is the school they were hoping for, the square footage, the features they want or the location.'

Reyes agrees. 'There's tons of competition and multiple offers, even for fixer-uppers, which most of these houses are. I've had clients repeatedly beaten out by investors looking to flip the house or to fix it up and rent it out. '

Ashley and Derich Marsh graduated from Sonoma Valley High in 1995 and 1988 respectively, and they've finally given up looking to buy. 'We'll have to wait for a correction in the market,' says Derich, who owns a business locally. 'Buyers doing VRBO rentals have driven up the prices to the point where first-time homebuyers who aren't coming in with equity from a previous home don't have a chance.'

Derich wonders about the ramifications of squeezing out young families - and what Sonoma Valley will look like in 10 or 20 years if this trend continues.

When the Marshes' oldest graduates from high school, they may move. 'We want to buy a house and plant roots somewhere. We just always thought it would be Sonoma.'

Powers isn't surprised, 'I'm noticing buyer fatigue. Families are giving up, at least for now.'

Reynes does expect that the new vacation rental restrictions will help. 'Word is only just now spreading that most of these second houses can't currently be used for vacation rentals,' said Reyes. 'That decreases the value of a property.'

The only families moving into Sonoma Valley these days seems to be older couples with plans to retire here, agreed several realtors.

'Most of the relocation sales are cash offers or couples with plenty of financing easily available to them,' said Reynes. 'Most own other houses, as well, and the prices here aren't a problem for them.'

The fact that the town may soon be filled with part-timers without a lot of connection to the town or its past, worries many who grew up here.

It's even worse in the rental market, says Reynes. 'It is so hard to find an affordable place and families who have had a good situation are in trouble if their landlord wants to sell and they can't find another rental they can afford.'

There's no end in sight to the inventory problem.

'New home building is really lagging demand,' says Powers, who notes that no big new neighborhoods are going up.

And, Derich Marsh points out, that 'there's little available in the price range between 'affordable housing' and luxury properties.'

Not everyone potential buyer is angry and discouraged, however. Kristen Church-Drummond and her family are in the market and she believes things will start getting better for young families trying to purchase a home in Sonoma.

'The vacation rental restrictions will help us soon,' says Church-Drummond. 'We're looking now. I agree that Sonoma is very expensive but how lucky are we. It's such a beautiful and safe place to raise our children!'

Contact Lorna at lorna.sheridan@sonomanews.com.

SPOTLIGHT ON HOUSING

Has Sonoma Valley’s “housing crisis” reached a tipping point? Many think so and are calling for action. But action from who, and action as to what? In this third part of our four-part series focused on Sonoma Valley housing needs, Index-Tribune reporter Lorna Sheridan takes a look at the lack of inventory and sky-high prices young families face when trying to purchase a home in Sonoma.

What does $500,000 get you in Sonoma Valley today?

Verde Vista 2-bed, 2-bath house with 988 sq. ft. for $489,000

Sonoma Highway 1-bed, 1-bath house with 824 sq. ft. for $437,000

Park Tree Lane 2-bed, 1-bath condo with 1,054 sq. ft. for $419,000

Bernhard Avenue 2-bed, 2-bath house with 1,120 sq. ft. for $450,000

Broadway 2 bed-2 bath condo with 976 sq. ft. for $419,000

West Spain 3-bed, 2-bath condo with 1,412 sq. ft. for $459,000

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