The rental on Second Street West, near West MacArthur, is a nice-looking three-bedroom with 1,740 square feet, modern conveniences and a good-sized yard. For just $2,800 a month, according to the Craigslist ad, the “beautiful townhouse in downtown Sonoma” can be yours.
Slightly more humble is the two-bedroom condo unit located two blocks from the Plaza on First Street East. That one is less fancy – 1,400 square feet in size and listed at $1,700 a month, according to Craigslist. No pets.
“I rented the condo in less than 24 hours,” said Jennifer Powell, a rental agent for Sonoma Properties, which listed both units. “I never was even able to order a sign.”
As for the Second Street West property, “I have applications on it,” Powell said. “So it’s just a matter of finding the right fit for the owner. But everything’s moving. Nothing is staying put.”
Anecdotes abound of dozens of would-be renters showing up whenever a property becomes available. The rental market is so hot right now in Sonoma and Sonoma Valley, according to many market-watchers, that it’s hard to put a number on average rental prices or inventory.
“About 20 percent of inventory coming in is being rented before it gets advertised or listed,” Powell said. “I’ve got a bunch of really good applicants with not enough housing.”
Generally, rental prices in Sonoma might be grouped in the ranges of $1,000 to $1,500 for a one-bedroom, $1,500 to $3,000 for a two-bedroom and $2,400 to $3,500 for a three-bedroom home, depending on location, condition, amenities and other factors.
Though hard to pin down precisely, “They’re higher than what they used to be,” Powell said of the rents.
The causes are myriad but well-known to real estate experts, who first point out that the region’s impacted housing market led to an even more impacted rental market, with limited options heading into the summer months.
“The supply has been fairly low,” confirmed Kimberly Buchanan of Sonoma Management, which describes itself as the Valley’s largest property management company. “Inventory is starting to pick up now that it’s summer. But the demand is really high. I’m finding that there’s a lot people looking for rentals.”
The same holds true for homes for sale, a relative scarcity that has driven up the price of already-expensive real estate in Sonoma. “The area is small and it is a desirable place to be. Currently, there is high demand for limited inventory,” said Tina Shone of Sotheby’s International Realty in Sonoma.
That crunched the rental market, with houses once occupied by renters now being sold out from under them. This simultaneously puts more people into the rental market while taking away rental inventory.
Other factors compound the problem. Shone cited people losing their homes in the financial crisis, and the lack of construction during that period as well.
Powell agrees. “There were a lot of bankruptcies and foreclosures in the past, and that’s pushed people into the rental market. And nobody’s moving – they’re staying.”
Why stay when the rental market is so rough? “People love the small-town feel, all the reasons that anyone would want to live here,” said Buchanan. “It’s a small community, it has a small-community feel. People like that coming out of the bigger areas.”
Of course, other renters are just trying to stay in the town where they’ve lived for years, have a job and maybe a family – and the house they’ve been living in has been sold. “I’ve had people contact me saying the house they’re living in is going up for sale and they need to move,” said Powell.
For a solution to the problem, most point to increasing the local housing inventory. Local leaders are working on that, said David Goodison, planning director for the city of Sonoma.
“In February of 2013, Sonoma Valley Oaks opened,” Goodison wrote in an email. “This is a 43-unit, affordable-apartment project on Sonoma Highway, funded in large part by Sonoma’s former redevelopment agency.”
Other projects both large and small are in the pipeline, Goodison said, including Mission Square, a 14-unit mixed-use development on East Spain Street that was approved by the City Council in February. Merlo, a three-unit development on Broadway, also recently passed the approval process.
Meanwhile, “An application has been filed for an 11-unit apartment project at 840 W. Spain St.
This proposal will be reviewed by the Planning Commission relatively soon, most likely in July or August.”
There’s also Sonoma Springs, a mixed-use project near Sonoma Charter School that will add 100 affordable housing units – but not for a couple years, at least. And an affordable housing project on West MacArthur is currently under construction by Steve Ledson.
All in all, Goodison said, the region seems to be moving through a normal cycle whereby “housing development dries up during a recession and the rental market tightens due to foreclosures. When recovery finally comes, the rental market gets even tighter, but it takes a while for new projects to come forward and compete the approval process. Right now, we are still in that lag period.”
“I am seeing more construction being done, starting back up again,” agreed Powell. “It seems like the sales side is going OK. It’s a cyclical market.”
Availability ties in with affordability, meaning the more inventory that comes on, the more affordable the market will be. Current countywide median sales prices are up 14.2 percent from a year ago, according to reports.
As of 2012 more than half – 55.6 percent – of Sonoma renters paid in excess of 30 percent of their income on housing, a percentage regarded as the standard amount of what people should pay for housing in order to have enough left over for life’s necessities.
Those numbers may get worse before they get better – but development trends seem to indicate that relief is on the way. Meanwhile, says Buchanan, if you see a place that works for you, strike while the iron is hot.
“If people spent too much time thinking about it, it’s going to be gone,” she said. “A lot of times I’m renting things before they go out on the market – and they’re going very quickly.”