Below is a graph with some very interesting stats which give me pause and commentary. This is a look going back 10 years to the wild and crazy pre-“crash” days of yore. The first thing which amazes me is the amount of homes for sale vs. today. 8,230 listing 3rd qtr of ’07 vs. this past quarter’s measly 1393.
The MSI or Month’s Supply of Inventory, is another indication of a fast, tight market. From 11.7 months supply (big Buyer’s market), 1st qtr of ’08 to 1.8 months supply 1st qtr of this year. New listings per quarter? Past quarter is the lowest in 11 years. Yeah, where are all those listing!?
Here in the “Wine Country” of Sonoma County, California–home availability is very tight and our price brackets for homes do NOT reflect very well for affordability when compared to the overall nation. See the graph below.
Yes, there are places in the nation where homes/condos are readily available for UNDER $100,000. And you’d be very surprised how much home you can get up to $250,000. In Sonoma County it is slim to none and slim just left town. Our big price point is $500,000 to $750,000 followed by the next highest price bracket. The age old question of affordability–where do all the service folks, teachers, police officers, fireman, find a home without breaking the monthly budget? Tis the question!
Here in Sonoma County, California, “The Wine Country”, we are seeing persistent scarce homes to sell and lack of affordable homes is raising its ugly little head. The only category where sales are out-performing last year is in two price categories: $500 to $750K and $750 to $1,000,000K. These are for detached single family houses.
Here in the “Wine Country” of Sonoma County, California, home prices have moderated over the past 5 months but affordability reached a new “post-crash” low of 24%. This means only 24% of our citizens can afford to buy the median home price of $529,000 based on the county wide median income.
Median home price has been flat for 6 months. However, affordability is lacking. Numbers over columns are Sales for the month. Biggest sale month in July which you can expect considering this is when everyone is moving about before the schools start but also while folks are moving INTO the area or are here as tourists.
Here is what we look like as far as the Bay Area affordability index:
And if you think 24% affordability is tough just look at those poor buyers in San Francisco, San Mateo or Santa Clara counties. Affordability leader is Solano County at 44%. Remember though, this “formula” used by the California Assoc. of Realtors is based on buyers making the median income for their county and using 20% down. Granted, not every buyer has 20% down (believe me on this one!) but it is a constant which measures long term affordability. Either way, the trend does not bode well for buyers. Now if the FED increases rates, which by every indication they will, the affordability rate could plummet further. When we encourage you to buy this is NOT a hollow, sales person’s chant–it is based on trends. Also, the FED has stated they may NOT make the increases small. Back in 2000 we were also lamenting the lack of affordable housing but rates then were 8.21%!! Today we have 3.875%. Now REALLY is the time to buy!
The new years is getting off to a slow start. January was the worst “Sales” month in 7 years. We sold, for the entire county, only 221 “Detached” homes. February, with only 28 days, didn’t boast any significant increase over January with a meager 241 homes closed.
Our median home price in Sonoma County is now hovering at $490,000. I expect this to increase as we are seeing much overbidding due to the lack of inventory. Note we broke the $500,000 medium home price threshold a few times last year. We are up year over year 9% which is WAY down from the double digit 20% numbers over the past three years which saw our median home price for the county soar 58%! (see chart below)
The lack of inventory is creating this “shortage” of sales. WE now have just over 500 “Active” or “Showable” listings in ALL of Sonoma County. This means for Petaluma, Cotati, Rohnert Park, All of Santa Rosa, Windsor, Healdsburg, Cloverdale, Sonoma, Oakmont, Kenwood and Sebastopol PLUS our coastal communities and the Russian River!! NOT Much at all.
Good news for all those buyers out there is the above slide showing the “new homes” coming to the market which is up +10% over last year at this time. However, having such a skinny supply of homes means these new homes are getting snapped up so our “Active” or “Showable” listings just don’t get increased by any significant amount.
Bottom line? If you are thinking of selling try and take advantage of this lack of supply before the major thrust of listings hit the market. Buying? Maybe hang out a bit and wait for inventory to increase as in today’s market you’ll be paying more as overbidding is rampant. Either way, we can help you with ALL of your real estate needs. Thinking of moving out of the area? Allison and I have many super Realtors not only in the U.S. but also abroad we can refer you to.
Call Allison at: 707-799-3617 for an appointment to discuss our marketing strategies or email us at firstname.lastname@example.org because in real estate Allison and I believe there are NO dumb questions!
Sonoma County Realtors and Homeowners should keep track of these 6 leading indicators to a healthy real estate market. One NOT on this chart is the “Distressed” market. Once almost 60% of ALL of our monthly sales in Sonoma County, it is dropped off to ONLY 10%. Welcome to a “normal/equity” driven marketplace. The big REO or Real Estate Owned wave of foreclosed homes has gone by the wayside.
In the chart to the left we can see a tad bit of “re-trenching” of median home price but STILL up over 22% from last year at this time. Of course, with surging home pricing we see a FALL in home affordability as witnessed in the drop from 49% last year to a disturbing 32%. Let’s hope we can keep this number in the 30% range. Still, NOT a good number. Other items–interest rates have lurched almost 1% higher and inventory keeps shrinking. We are in a “normal” winter cycle with most folks awaiting spring to place their homes onto the market. Get a jump on them and think about LISTING NOW! Less competition, serious buyers, low rates and big pricing. Contact Allison and I to assist you in determining your REAL price in today’s super competitive marketplace.
Sonoma County, California median home price up 51% in the past two years. Home sales are lagging due to seasonal changes but the median home price keeps right on it’s upward spiral. The reason? The distressed sales market or those properties being sold as “bank-owned” “REO” (Real Estate Owned) and Short-Sales have dramatically disappeared from the real estate scene. Once as high as 56% of ALL Sales, this past month they dropped to a combined 8% of the total sales for October; a 83% drop.
The Distressed market pricing was substantially LOWER than the current “Equity” market of regular home sellers. So as the Distressed market is supplanted by the “Equity” seller list prices climb, hence sales median home prices. The “Non-Bank” or “Equity” sellers are up 90% in the “Under Contract” section of our monthly market stats–BIG NEWS for a solid recovering market! Continue reading 51 BIG reasons to BUY REAL ESTATE NOW in Sonoma County!→
That’s the headline–Monthly Sales DOWN–market must be cooling? Sluggish? But look closer–break out the sales by price point and it is a dramatically DIFFERENT STORY! See the following graphs:
As you can see by the above graph OVERALL Sales for Sonoma County -5%. BUT–let’s dig deeper and drill down on the price segments:
Here’s $500,000 to $750,000–UP BIG TIME Year over Year. UP +87%! The “Equity Seller/Buyer” is back. This was one of the hardest price points hit during the big heyday of the “Distressed Marketplace”. We had plenty of sellers (the banks) but they NEVER bought when they SOLD. So the “move-up” buyer disappeared and sales sagged. They have ROARED BACK.
$750,000 to $1,000,000 UP a remarkable 95%. Remember, all real estate is local and the “overall’ market number, though a good indicator does NOT reflect YOUR home and the price segment of which your home represents.
As we well know, Sonoma County, is considered a “destination” county–meaning tourists and prospective relocating companies, buyers, KNOW that this county offers a wealth of attractions, amentias NOT found in other bay area counties–consider this–we have a gorgeous, rugged Coast, Old growth Redwood Trees, some of the BEST wine appellations in the world, how about “Foodie” heaven. PLUS we are an hour away from one of the most exciting cities in the world–San Francisco with international air service, World Series Champs Giants, and the iconic Golden Gate Bridge. So this $1 Million PLUS graph shouldn’t SURPRISE anyone. Solds are up a staggering 187% over last year.
Sonoma County, California–Note that the “Pre-foreclosure” market place, those 90 days late or “in-default” has fallen dramatically, almost 70% from the previous year, same is true of the “Auction” properties with a BIGGER decline of over 75%. However, the actual “Foreclosed” upon homes is NOT that dramatic year over year, 45% decline but note the “month” it is actually dead EVEN over last year. Hmmmmmmm?
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