The slowdown in the Sonoma County, Calif., residential real estate market sharpened in November, when sales and prices declined while the number of homes available for buyers jumped significantly.
The slowdown represents a continued adjustment from the initial real estate jolt immediately after the fires, according to local and Bay Area real estate experts.
In November, the county’s median housing price fell to $615,000, a decline of nearly 9% from the record peak of $700,000 in June, according to The Press Democrat housing report, compiled by Rick Laws of Compass real estate brokerage, formerly Pacific Union.
Even more striking, the number of homes sold in the last three months has fallen to its lowest level in eight years. And the number of homes for sale at the end of November increased to 909, a 77% increase from a year earlier.
Lori Sacco, managing broker at Vanguard Properties, said the November year-over-year spike in inventory — from 515 to 909 homes for sale — says a lot about the impact of the fire on the local housing market.
“When the fires first happened, people with means bought houses and they bought them right away,” she said. “They paid whatever it was going to take to get that house. That pushed the values up.”
But she said that many of those people are now out of the market. A “correction is happening now, relative to the bump we had due to the fires,” she said.
Though the market appears to be trending toward greater balance between buyers and sellers, Sacco said the North Bay wildfires are likely to affect the local market and economy for years to come. The November correction is on top of the normal seasonal decline that takes place leading into the winter months and during the holidays, Sacco said.
“It’s the holiday season. People take their houses off the market, they go on vacation. Homes don’t look so attractive during the rainy season,” she said.
The current slowdown in home sales is evident throughout the Bay Area, but is happening to a greater degree in the North Bay and especially in Sonoma County, according to a recent analysis of the local housing market one year after the October 2017 wildfires, which destroyed 5,334 homes in Sonoma County.
In the first month after the fires, home sales declined 11% in the North Bay, compared to the previous year. But home sales jumped 15% in November 2017, when many buyers responded to a sort of post-fire panic or “knee jerk” reaction, said the report’s author, Selma Hepp, vice president of business intelligence and chief economist at Compass.
Even as year-over-year home sales in the Bay Area saw declines in November, December and January last winter, sales in the North Bay remained elevated during that period. That sales boost, however, ended in March, when North Bay sales activity began to ebb, mirroring the slowing sales trends elsewhere in the Bay Area, according to Hepp’s report.
By September of this year, Sonoma County posted the largest year-over-year decline of all Bay Area counties, at 26%, according to Hepp’s analysis. The increase in inventory in Sonoma County is largely driven by the availability of homes under $1 million, a trend that is also evident in other parts of the Bay Area.
Tribune Content Agency