Sonoma County homebuyers, renters strained as housing costs soar
Eight unprecedented years of meager home construction continued in 2016 to take their toll on Sonoma County residents seeking a place to live.
First-time homebuyers lamented that rising values made it increasingly difficult to find properties in their price range. Prospective renters, meanwhile, once more found themselves running a gauntlet of fierce competition, sky-high rents and stringent qualifying criteria.
In searching for a rental, too often “you’re going to be one of a minimum of 100 other applicants,” said Kate Miller. Her family spent most of the year searching for a new rental and spent 15 days in a hotel this month before landing an apartment in east Santa Rosa.
After the long construction drought, home builders this year did increase activity, but not as much as officials first expected.
In response to the housing crisis, local officials began to take action in 2016. A significant step came in August, when Santa Rosa became the first local city to impose rent control, a decision that came in a split City Council vote over the objection of real estate interests.
Rent control opponents in September turned in enough voter signatures to force a citywide referendum on the matter. The future of the city’s rent control law - now suspended - could be up to voters in June.
‘Build, baby, build’
The new year is also expected to include efforts by city and county governments to turn ambitious housing goals into actual new units. The results remain to be seen. But given the decades-long battles here to restrict growth, it can feel striking to hear normally progressive officials sound the call for more development.
“Build, baby, build,” county Supervisor Shirlee Zane chanted at a recent housing summit, voicing what she says will be her motto for 2017. Housing represents an urgent need in the community, she said.
“People are suffering,” said Zane, whose district includes Santa Rosa, “and it’s our job as political leaders to do something about it.”
When a national housing bubble burst in 2008, home values crashed and demand for new homes tumbled. Housing construction plummeted and stayed at levels not seen in the county for at least four decades.
From 2000 to 2008, the county added 16,000 people and nearly 18,000 houses, apartments and condominiums, according to the state Department of Finance. In the next eight years ending in January of 2016, the county’s population grew by 27,000, but builders added only 6,300 housing units.
In the early years of the downturn, homebuyers turned from purchasing new houses and instead snapped up a wave of foreclosures and short sales, the latter being properties sold for less than the amount owed on the mortgage.
In 2009, such financially distressed properties accounted for over half of all single-family homes sold in the county.
But the number of distressed properties on the market has significantly declined in the past three years. To date this year, they accounted for just 4 percent of all single-family sales.
That decline is one reason why the number of homes being listed for sale in 2016 was at its lowest level in at least seven years. It also helps explain why the county housing market ended November with roughly a 1.6-month supply of available homes, a level considered a sign of a seller’s market.
“We’re just not seeing the inventory,” said Mike Kelly, an agent with Keller Williams Realty in Santa Rosa. “And hence, we’re not seeing the sales.”
Meanwhile, rising home prices have reduced the number of potential buyers. The county’s median home price hit a record $619,000 in August 2005, tumbled to a low of $305,000 in February 2009, and by last month had risen back to $575,000.
As prices have rebounded, first-time homebuyers say it has become hard to find anything in their price range, typically $500,000 or less. Only about a quarter of county households today can afford to purchase a median-priced home here, according to the California Association of Realtors.
Some do find success. Jonathan Garza, a registered nurse, had been looking about six months when he saw a four-bedroom, two-bath home come on the market on Cambiaso Place in Santa Rosa’s Rincon Valley. He called his real estate agent at noon to arrange a look, and by 9 p.m. the owners had accepted his offer of $509,000.
“The stars aligned,” said Garza, who had one previous offer rejected. But here was a case where the sellers were looking to close quickly in order to buy another home, and no one else had yet made an offer on the home.
Belinda Andrews, a broker associate for Century 21 in Santa Rosa, said Garza succeeded because he was willing to swiftly make his best offer.