Rick Laws quoted by Press Democrat
February 15, 2018
Upended by fires, Sonoma County housing market inventory hits 25-year low
Still shaken from last fall’s wildfires, Sonoma County’s housing market saw its inventory drop in January to the lowest level for the month in more than a quarter-century.
The county ended last month with only 414 single-family homes for sale, according to The Press Democrat’s monthly housing report, compiled by Pacific Union International senior vice president Rick Laws. That is the lowest level for January since Laws and his predecessor, real estate agent John Favre, began collecting data for the newspaper in 1990.
“Inventory has never been this low,” Laws said. “That’s big.”
Laws and other agents said the fire set off a scramble for housing that continues to be felt four months later.
“We have a lot of people who aren’t rebuilding, and that added to the demand,” said Bill Facendini, president and broker of Terra Firma Global Partners in Santa Rosa.
Trish McCall, an agent with Keller Williams Realty in Santa Rosa, said she now sees fire survivors seeking to purchase homes because they are “sick” of apartments or other rentals.
McCall said clients tell her, “I don’t want to live like this anymore. I want to get my life back together.”
Buyers in January purchased 264 single-family homes in the county. Sales increased 11 percent from a year earlier and were the highest since 2014.
The county’s median sales price was $670,000, less than 1 percent below the revised record high for December of $673,500. The median price last month increased nearly 16 percent from a year earlier and has more than doubled since hitting a low of $305,000 in February 2009 during a national housing crisis.
The county’s housing market is still feeling the effects of October wildfires, which claimed 24 lives and destroyed more than 5,100 homes here.
In November and December, buyers here purchased a record $738 million in houses and condominiums. The amount surpassed the value of such properties, not adjusted for inflation, that sold at the height of the housing bubble 12 years earlier.
The county’s housing inventories have fluctuated dramatically since the turn of the millennium. In 2005, during the height of the housing bubble, the number of available homes at the end of January totaled 575.
In 2008, when home prices plunged and foreclosures skyrocketed, the inventory for the end of January mushroomed to 2,098.
The large number of foreclosures kept inventory inflated above 1,000 for January through 2012. But the number of available homes hasn’t exceeded 600 for the month since 2013.
Last month’s record-low inventory didn’t come about because of a drop in properties coming to market. Sellers last month placed 330 single-family houses for sale as new listings. That was the largest number for the month in four years.
Tom Kemper, manager of the Coldwell Banker office on Bicentennial Avenue in Santa Rosa, said even with tight supply, certain sellers have needed to drop the sales prices on their properties. However, that usually happens because a house was initially overpriced or needs considerable work.
In contrast, attractive, “turnkey” homes priced correctly are often receiving multiple offers that exceed the asking prices.
“Those are the houses that everybody talks about,” Kemper said.
For the past five years, the county’s housing market has been marked by rising prices, stable or declining sales and a limited supply of inventory. Agents said they don’t see those trends changing dramatically in the coming months.
The rising prices may cause more residents to list their homes for sale this spring or summer if they already were thinking of moving from the county in the next few years.
Laws said those residents may say, “Honey, let’s move up our timetable. … Maybe we should take advantage of this.”
But agents noted that the market remains relatively inhospitable for sellers who want to stay in the county and find another home to purchase here.
That is especially the case for residents seeking smaller homes. They often find few houses to choose from and plenty of competition for the available properties.
“The more you’re downsizing, the more you’re going into the hotter market,” said Kemper. “It’s not an easy thing.”
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