Median home price hits 5-year high in Sonoma County
Published: Wednesday, May 15, 2013 at 7:05 a.m.
Last Modified: Wednesday, May 15, 2013 at 7:05 a.m.
Sonoma County's median home price jumped above $400,000 in April for the first time in nearly five years, a symbolic marker that shows just how much the local housing market has changed in the last 12 months.
The median price of a single-family home climbed to $435,500 last month, according to The Press Democrat's monthly housing report compiled by Pacific Union International Vice President Rick Laws.
The price increased 10 percent from March and 26 percent — or $100,000 — from a year earlier.
Part of price jump was driven by a shift in the mix of sales, with an increase in transactions among more-affluent neighborhoods. As well, sales of financially distressed properties have fallen to their lowest level in more than four years.
But brokers said home values also are rising as multiple buyers bid on properties and the number of available homes remains at its lowest point in nine years.
“Prices are going up rather dramatically,” Laws said.
Buyers purchased 460 single-family homes in April, an increase of 4 percent from a year ago. Four out of every five sales involved owners with equity — the highest rate in more than four years.
Homebuyers first saw the median price exceed $400,000 in April 2003, when a housing bubble caused home values to nearly double in five years. The median peaked at $619,000 in August 2005.
Three years later, the median fell below $400,000 in July 2008. Prices kept plunging and hit a new low for this real estate cycle of $305,000 in February 2009.
As prices tumbled, more than 10,000 county homeowners lost houses and condominiums to foreclosure during the past six years. Another 4,000 relinquished properties through short sales, where the transaction price was less than the debt owed on the mortgage.
The result: more than 14,000 distressed homes were thrust onto the market, or roughly three years worth of sales.
A year ago, four out 10 sales involved foreclosures and short sales.
But now the number of distressed homes coming to market is the lowest for any month reported in records that go back nearly five years. Last month only one in 10 new listings involved a foreclosure or short sale.
Meanwhile, the number of new listings for homes with equity has steadily increased. In April, equity sellers listed 521 new properties, the most for any month in more than four years.
Brokers suggested the growth in such listings shows that more equity sellers have decided the market has changed and the time is right to sell. Historically low interest rates are helping spur both buyers and sellers to action.
“That's what we're preaching to our agents, to get out and get listings, because we need that inventory,” said Dave Corbin, managing broker for HomeSmart Advantage Realty in Santa Rosa. “We have plenty of buyers.”
April ended with 734 county homes for sale, less than a two-month supply of inventory at the current pace.
Among the properties is a three-bedroom, two-bath contemporary home on B Street in the Victoria neighborhood of southwest Petaluma. Listed at $575,000, the home has been on the market a week and the owners are considering multiple offers, said Timo Rivetti, a broker associate with Keller Williams in Petaluma.
A few years ago, some homes in the neighborhood took more than a year to sell. In early 2012, similar houses were selling for close to $100,000 less than the home's list price.
“That market's definitely come back,” Rivetti said.
Experts say a balanced market has roughly a six-month supply of available homes. Thus, brokers consider this a seller's market.
And they said the imbalance likely will continue for the months ahead, even though more owners are expected to list their homes for sale this summer.
“I think it's going to be a challenging market for buyers for the remainder of the year,” said Brian Connell, broker/manager for Frank Howard Allen in Santa Rosa.
This year's home sales show a distinct shift by price segments from a year earlier. Sales to date have declined 33 percent for properties purchased for less than $400,000, compared to the first four months of 2012. Meanwhile, sales above $400,000 have increased 39 percent.
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