Glen Ellen real estate market proving fire proof

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Glen Ellen and Kenwood are the wine country ideal: rolling hills, ancient oaks, wide, postcard views. Real estate is priced higher there than elsewhere in the Valley, with the deep peace and quiet justification for the price.

But when wildfires leveled 376 homes, did the bottom fall out of the real estate market there? Are homeowners gun shy and preferring to live elsewhere, appraising their prized landscape with a jaundiced eye? Are newcomers now hesitant to plant themselves in a place where wildfire can erupt in the dead of night? Or did the fire set the table for opportunistic real estate speculation, where buyers can swoop in and pick the bones clean?

For Tina Shone, a Sotheby’s International real-estate agent with expertise in Glen Ellen and Kenwood, even wildfire can’t tarnish its charm. “Glen Ellen is still a lovely place. We just sold a place — over asking! — on O’Donnell Lane. Walk to town, public utilities, a creek nearby, cute little bridges,” she said.

O’Donnell Lane was particularly hard hit during last year’s fires. Twenty-three homes were burned to the ground. But as Shone and other real estate agents have found, even catastrophic fire can’t cool a hot market.

“We’ve sold several properties this year,” Shone said. “One was going to come on the market anyway, as the owners had plans to retire elsewhere. Another homeowner with two homes in the North Bay decided to list their Glen Ellen property, and another sold because the owners had aged out, after living in Glen Ellen since the 1970s.”

Shone said all three properties were near downtown Glen Ellen, not in the hills above town. She said parcels situated on Mayacamus and Sonoma mountains have been moving more slowly, though Shone doesn’t believe the wildfires are to blame.

“I can’t say that people are less interested in hilltop properties because of the fire, but because it takes longer to get into town. Town seems to be the trend right now,” Shone said.

Holly Bennett, also of Sotheby’s, doesn’t necessarily agree. She hasn’t found that buyers are avoiding the hills. “Just recently, there was a home on Summer Hill Road listed for $5.5 million that went under contract immediately,” Bennett said. “I’m not hearing any nervousness about living in the hills from buyers at my open houses.”

According to Trulia, an “independent and unbiased real estate search and advertising site,” 2017’s wildfires stoked Sonoma County’s already hot real estate market, driving the median home price to $749,000. Contributing to that 8.7 percent year-over-year increase was a simultaneous 13.9 percent decline in inventory countywide.

For Sonoma itself, the data is even more extreme. The median home is now $937,000, an increase of 28 percent from one year ago, and listings are down 25 percent. Searches for homes in the area are up by 19 percent, however, with the majority of potential buyers coming from Napa, San Francisco, Santa Rosa and San Rafael. And in Glen Ellen and Kenwood, cities that, according to Bennett, were the first wine country zip codes to blow past the $1 million ceiling years ago, prices are accelerating even more quickly.

“In January 2018, I sold two very nice properties in Glen Ellen/Kenwood, one for $6 million, the other for $4.25 million. Bay Area buyers aren’t concerned about parking their money here and investing in our community,” said Bennett, herself a Glen Ellen resident.

Burned lots, too, have been moving well, once owners make the complicated decision to sell.

One house, at 2585 Lawndale, which burned to the ground, had multiple offers after only 18 days on the market, Bennett said. “A spec builder paid $1.3 million and change, and it still had a lot of burned trees and a well no one knew the condition of.”

Shone confirmed that business has been brisk. “It’s been business as usual, steady, with some peaks. We had our summer lull, but business is picking up big time.”

“Inventory in the residential sector seems to be up,” Bennett agreed.

In fact, Trulia’s data shows an uptick in both listings and searches for the six months immediately following the fires, with 10 percent more listings and 7 percent more searches overall in Glen Ellen and Kenwood, compared to November-April 2016.

People who lost their homes have rebounded more slowly, however, with many stuck in a limbo of indecision, bureaucratic obstacles and a bottlenecked building industry. How does a person decide what to do, when the life they’ve been living goes up in smoke?

“Residential real estate is inner-voice driven,” Bennett said. “People who lost their homes need to gather facts, go through the process, and make a good internal decision for themselves.”

As for the economic opportunities presented by real estate in Glen Ellen and Kenwood currently, Bennett believes the sky is the limit. “A lot of these houses that were lost were old ranch-style homes on gorgeous level lots with mature trees. When they’re rebuilt as modern homes, values will change substantially, and that’s going to significantly alter the community. I think it’s going to be a couple of years, but the community is going to come back stronger and more popular than ever.”

Shone defaults to basic principles of economics when advising her clients, quickly getting down to the brass tacks of supply and demand. “They’re not making any more land, right?” she said.

Moving forward from the fires that destroyed so many homes, Trulia analyst Alexander Lee sees wine country real estate trending hotter than ever. “Despite the fires that swept through Sonoma Valley toward the end of last year, demand for housing in the area is stronger than ever. As prices surge in the nearby Bay Area beyond record highs, the Sonoma Valley is still an attractive alternative. As expensive as it is, it still looks affordable compared to nearby places. Natural disasters aren’t enough to keep people from wanting to live there.”

Contact Kate Williams at kate.williams@sonomanews.com.

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