Sonoma County home prices decline to lowest level this year
Sonoma County home sales rebounded in October, boosted by a spate of price reductions that pushed the median price to its lowest level of the year.
The median price of $649,500 has fallen from its June peak of $700,000 and now is nearly unchanged from a year ago. The price decline in October from a year ago is rare for a housing market that has steadily gotten more expensive for more than six years.
Meanwhile, the sales of 420 single-family homes last month represented a 27 percent advance from a dismal September and the highest level in three years for October, according to The Press Democrat’s monthly housing report compiled by Pacific Union International senior vice president Rick Laws.
Last month’s price reductions show homebuyers have gained negotiating power after years of sellers holding the advantage, regularly enjoying multiple offers and getting higher prices for their properties.
“Buyers have leverage out there for the first time in three years,” said Adam Menconi, team leader and broker of Prosper Real Estate in Santa Rosa.
Even though the nation’s housing market shows signs of slowing, the bump in local sales last month serves as a reminder of the demand still here for houses after a decade of sluggish residential construction and the destruction of about 5,300 homes in October 2017 during one of the worst wildfires in California history.
The October sales increase came from buyers who closed deals after months of wariness about paying too much for a place to live in the county, several agents and brokers said.
“The serious sellers reduced their prices,” said Jeff Hill, an agent with Bertolone Realty in Santa Rosa. For example, Hill listed a home on Terra Linda Drive in Santa Rosa where the seller recently reduced the asking price to $695,000 and the property this week went into escrow.
Laws of Pacific Union cited a “push back on price” by buyers as the most likely reason sales had hit an 11-year low in September.
“There’s still a lot of buyers who want to buy, but they just don’t want to overpay,” he said.
Working with the local multiple listing service, Laws found that sellers had cut prices on roughly a third of the houses on the market in October. That amounted to nearly 540 properties.
County home prices, meanwhile, have more than doubled since a national housing market crash depressed the median price to a low of $305,000 in February 2009.
For the past six years, Sonoma County housing conditions have made it a sellers’ market with steadily increasing prices and a relatively low number of homes available for sale.
More recently, the local housing market can be divided into two periods following the historic Tubbs fire in October 2017. The disaster set off a scramble by fire survivors for replacement housing. In the first six months after the fire, home sales increased by almost 11 percent compared with the same period the year before, or slightly more than 200 houses. In the next six months, sales dropped by 7 percent, or nearly 200 houses.
Meanwhile, the median price climbed 13 percent from September 2017, the month before the devastating fire, through June. But by late spring, agents began to notice a sales slowdown, followed by the decline in the median price.