Home Sales in Sonoma County, California dropped a seasonal 28% from December’s Sales totals. This is consistent with January sales going back 3 years and historically is a very “weak” month when it comes to home purchasing. What IS consistent is the “Distressed” home sellers which punched through the 60% barrier–not seen since April of ’09. This means that 60% of the 304 Sales in the month of January where either REO (Real Estate Owned) or Bank seized foreclosed upon homes and “Short-Sales wherein a property owner is selling for LESS than what is owed on the house.
A major gauge as to the health of a marektplace is the absence OF the “Distressed Marketplace”. Sonoma County is predicted to be in this “Distressed” market for years to come with some economists predicting at least 5 years. What will eliminate the “Distressed” market will be two events–the current crop of foreclosures and “under-water” properties will be eventually exhausted, foreclosed upon, modified, short-saled OR we will have appreciation which will allow large scale refinancing and allow home sellers to sell without having to sell short. Until then expect a large percentage of homes to be “distressed” when they are placed on the market and many families will be “frozen” into their homes with no way to move down, up or out!