Buyers and sellers seem to think Sonoma County home prices finally have peaked, after doubling the past seven years.
Sellers are putting more homes on the market this year, thinking prices won’t get better anytime soon, real estate agents and brokers said Monday. The new listings have ballooned the inventory of houses for sale in August to the most since 2011 and meant more choices for wary buyers, who are increasingly cautious about overpaying for a property. It all appears to indicate the county’s housing market is slowing.
“The word out there is we’re starting to go down a little bit,” Berkshire Hathaway HomeServices agent Ingrid Mathews said of home prices. As a result, buyers are “so skeptical.”
They bought 471 single-family homes in the county in August, a decline of nearly 10 percent from a year earlier, according to The Press Democrat’s monthly housing report compiled by Pacific Union International senior vice president Rick Laws.
Despite the double-digit monthly decrease in sales, on a year-to-date basis since January they have dropped only 2 percent.
“The beat goes on,” said Laws, “but overpriced homes are not selling.”
Buyers are making fewer offers, too, he said.
As a result, more sellers are cutting prices, something rare here in recent years.
Fresh home listings have increased 8 percent since the beginning of 2018. The increase has led to the largest inventory of homes on the market since 2011. The month of August ended with 1,138 single-family homes for sale, an increase of 36 percent from a year earlier.
Glenn Gephart, an owner and general manager of Century 21 NorthBay Alliance in Santa Rosa, said another sign of the market’s slowdown is houses are taking longer to sell.
Sixty percent of the available single-family homes in Santa Rosa have been on the market for more than a month, he said. Historically that would be typical, he said, but he called it “certainly unusual” for a housing market that in recent years has featured a tight inventory and strong demand.
County home prices have tumbled and soared over the past decade as the housing market weathered the historic stock market crash on Wall Street and the most destructive wildfires in state history. The October 2017 fires claimed 24 lives and burned nearly 5,300 homes in the county.
In August, the median single-family home sales price rose slightly from a month earlier to $665,000, and an increase of 7 percent from a year ago. The median sales price has more than doubled since August 2011, when it was $330,000. In June, the county posted a record high median price tag of $700,000.
Most brokers and agents continue to characterize residential real estate as a seller’s market. They say even with increase of homes listed for sale, the available inventory amounts to slightly more than a two-month supply at the current sales pace. A balanced market would have a supply of three to six months.
Today, potential sellers are hearing about more price reductions, agents said, and many of them are wondering whether the pricing downturn will last during the next few years.
Pat Provost, another Century 21 owner, said many sellers have concluded, “If we’re going to sell, we should sell now.”