Category — Real Estate

Rolling hills, ancient oaks, and great views define the eastern slopes of the Alexander Valley which runs from Cloverdale in the north to Healdsburg in the south. This long stretch of land follows the Russian River which has blessed the valley floor with rich, alluvial soils that produce wonderful grapes. Cabernet Sauvignon and Chardonnay predominate, but you can plant most varietals here with good results.

We have just listed two estate site properties near the north end of the valley close to Asti. The two separate, but contiguous parcels would be great for small vineyards or horses.

The land is rolling hills with the front of the bigger property beginning right on River Road near the summer crossing of the Russian River at Asti. The land rises gradually through terrain of trees and meadows. There is a knoll crossed by the invisible line that divided two land grant Ranchos.

That knoll is where the natural home sites area and where the two properties are separated. The smaller property dips down the back of the knoll and then climbs again to a high point at the back of the property. I took a screen shot with Google Earth to show the approximate property lines superimposed on the land.

This would be a wonderful estate site for someone who wants to build a family compound. There are two separate parcels, each of which could have an additional guest unit.

Serendipidy can be your friend. In my case, a maps.google.com search for the fastest route to Dillon Beach told me part of my drive should be on Roblar Road. It’s been a while since I drove that stretch of Sonoma County between Petaluma and Sebastopol, so this morning I went for a drive.

Man, it was beautiful.

Part of it was the light, but the magic was part green, part quiet, part animal, and a big dollop of pace. I was lucky that I left an hour early for my appointment. I had hoped to get some pictures on the drive, but the final results were much better than I had hoped for. It wasn’t just that I got some fun pictures, but that my mood got a chance to get mellow by sharing some space and time with a very special place.

The critters that get to hang out all day munching luscious Sonoma County grass may not notice that they live in a great area, but I think the California Cheese commercials on TV actually capture something when they talk about California cows. I haven’t seen any TV for sheep, but they seem to be in on the action as well.

The one bee buzzing around the picnic was an issue that I hadn’t been aware of until my drive today. There are efforts to open a quarry on Roblar Road. I don’t know enough to take sides on this, but I feel strongly that a neighborhood as peaceful and rural as Roblar Road deserves a chance to opt out of the path of progress if they choose to. You can read more details of the issues in this Sonoma West Times and News article

It’s easy to forget how blessed we are in Sonoma County. I was previewing a Healdsburg listing for some snow-bound clients who wanted to know what was blooming right now. The property owners obviously loved camellias and had planted some wonderful specimens to go with the quince and daffodils that bracket the floral show below. These photos are all from the middle of February.
Renowned horiculturist Luther Burbank considered Sonoma County “the chosen spot of all earth as far as nature is concerned.”

REO is the acronym for Real Estate Owned. Owned by banks, insurance companies, mortgage companies, and anyone else who ends up holding the deed when foreclosures are finished and there were no bidders (holders of ten or more of these properties are listed in the box on the left). These are the reluctant owners who thought they were buying guaranteed cash flow, but instead ended up with real property that most likely is worth less than the original loan amount. How we as a community of buyers, sellers, and brokers end up valuing and moving these homes into the hands of resident buyers and rent-minded investors is likely to be one of the most interesting stories in real estate this year.

First, the number of REO properties is small in absolute terms, but as of the end of the year, nearly 400 homes in Sonoma County fell into that category. Less than half of that number were actively on the market, so there is a growing reserve of over hundreds of REO homes that aren’t listed on the MLS yet. The sellers are motivated to get these properties off the books, but they don’t want to flood the market and depress prices any further. Still, the need to dispose of the homes will be a strong incentive for the REO holders to accept qualified offers and to avoid piling up even more inventory as the foreclosure boom continues.

Some properties are on the market now that I would classify as excellent values. Some are inexpensive enough to create a positive cash flow for investors; others are estate type properties at prices that will look like great deals in a few years. I can produce a list of the MLS-listed, REO single family homes available for download if you would like to see what’s on the market. I would also be happy to produce a list about REO properties in specific areas.

In the last six months 60 REO single family homeshave been sold. Selling prices ranged from $195,000 to over $1,000,000. Depending on location, the prices they are selling for are anywhere from 15% to 30% below the market peak prices of 2005. Almost nowhere in the county is immune from foreclosures, so these sales happened in south west Santa Rosa and the Russian River, but also in Healdsburg, Sonoma, Sebastopol, and Fountaingrove.

The other factor to consider along with REO’s in Sonoma County is short sales. These are sales for less than is owed on the property and the banks and other mortgage holders end up negotiating how much money they are willing to lose. Their alternative, of course, is to foreclose on the property and take their chances that either wiping out a second mortgage or a HELOC (Home Equity Line of Credit) might leave them in a position to recover their investment. There are more than 500 short sale listings right now, and it’s fair to say that all of them are highly motivated sellers. Add to this the even more motivated sellers of the 41 homes listed on the MLS that are in foreclosure or have a notice of default filed, and it makes this is an interesting time to be a buyer.

I have worked my fingers to the bone assembling Sonoma County residential sales and activity records for the last four years to answer the question in the title. Are we at the bottom? In order to get the broadest view possible I chose all residential sales in the county which mixes condos, single family homes, and farms and includes high price areas like Fountain Grove, Sonoma, and Healdsburg as well as south west Santa Rosa and the Russian River.

I’d like to point out two interesting patterns that hint at an answer. The first is sales volume which is indicated by the yellow line. Within that line which goes from January of 2004 to December of 2007 you can see seasonal variations. The two highest peaks on the graph are for the selling seasons in 2004 and 2005 when the market was hyper-active. If you were buying at the time you remember that every listing had multiple offers and no house was selling for less than asking price. Even if you weren’t in the market, the conversations around the water coolers and the golf course (or job site) were all about how much your house’s value had gone up that month. Looking back on it, we should have known it was crazy.

Continue tracking the yellow line to this summer on the right side of the chart and you’ll see the plateau that has occurred since the mortgage meltdown in August. We are far off our usual monthly levels, but I can actually take some grim satisfaction in seeing a plateau as opposed to continued declines. From the point of view of unit sales volume, we may have hit bottom. We’re going to be selling at least 250 homes a month if the trend continues. If you’re waiting for the magic month when nothing sells and the buyers have to panic sell, you’re not going to be rewarded. It will take a long time to clear our inventory at this rate, but homes that are priced right will sell.

The other interesting trend is the return of the median price to approximately mid 2004 levels. I have drawn a blue line for you to see that the median price (the shorter of the vertical bars) in May 2004 and December 2007 are about at the same level. Keep in mind that the mix of condos and luxury estates isn’t the same and that the market today has a much higher inventory, so the two months aren’t comparable directly. Still, as a rough finger in the wind estimate of the state of the market I think it would be fair to say that we have seen a big squeezing of the bubble and returned to a pricing level that averages about 20% less than the peak.

I’ll have more to say about pricing in my next post where I talk about REO (Real Estate Owned by banks) holdings and actual REO sales in the last six months. Just as a teaser for you, it’s clear that many homes in the market today are priced right. Let me know if you are interested in seeing information for cities you are interested in buying in.

Fitch Mountain dominates Healdsburg’s east side. The mountain fills the skyline and forces the Russian River to make a wide swing around the town. The blue circled area in the photo holds several hundred homes along S Fitch Mountain Road, N Fitch MountainRoad, Redwood Drive, and a network of other small roads that are in Sonoma County’s jurisdiction rather than the city of Healdsburg. These homes, for the most part, were originally cabins and weekend getaways. Over time many of them have been updated to modern standards, but this is still a rural community with the feel of most redwood-dense towns serviced by narrow roads. You might think of Felton and Ben Lomond in Santa Cruz County or Rio Nido in Sonoma County as similar feeling neighborhoods. Depending on where you are on the hill, you may be in deep shade all year, or in one of the fortunate spots with acess to full sun.

I just listed a property on the mountain with superb sun and nice river views. The blue circle on the photo to the right shows the house’s location with south being towards the bottom of the image and the river flowing from the north east towards the west. The river views from the house are westerly.

The house itself is right at the borderline of fixability. People may legitimately differ on whether the house should be torn down and built from scratch or repaired and upgraded.

The reality is that Sonoma County septic and construction guidelines will have more to do with how the new vs. remodel question gets answered than the actual situation might dictate. The single most important question that has to be addressed is the septic issue. There is no sewer service available on Fitch Mountain, and almost none of the existing residences could meet new code requirements for Class One septic systems. The current waste disposal systems exist and are maintained as well as they can be and are tolerated by the County as non-conforming.

Whether a home that has been unlived-in and red-tagged by the county will be tolerated without the upgrade to a Class One septic system is an open question. Potential buyers will have to hire septic system experts to analyze the site and negotiate with the county. Once that question has been answered, new owners can choose whether to build new or rebuild a home that sun lovers can appreciate.

I had a chance to visit a terrific ten acre property on Eastside Road near Forestville today. You’re never quite sure what you’re going to find on a place you can’t see from the road, but I have been driving past this secluded driveway for years and have never had a chance to see the house or gardens. First, let me say that you aren’t going to see it here either. Instead, I’m going to tease you with a handful of lovely details and encourage you to visit the “official” web site.

Small details matter to me. This place is filled with deft touches that indicate a deep affection for doing things right. The picture you’re looking at might be hard to make out, so feel free to click on it to see the larger view. What you are seeing is a gently curved piece of wood that serves as a bridge at the pond. Wood has the potential to be very slippery when it’s wet, and the builder has taken the time to carefully insert metal bumps to provide traction. It’s subtle and almost invisible when you’re walking, but it represents a care that is echoed elsewhere on the property.

At the same bridge, there is a lovely railing detail with a curved copper hand cleanly attached to the post. The two side rails are close enough to provide a secure feeling when crossing the bridge and are big enough to feel comfortable in the hand and look correct in the scale of the garden and pond. Again, just the right touch of design sense, choice of materials, and execution to be a fine detail.

The entry courtyard, home of the cactus in the first picture, is also graced with nice details. In addition to the diamond plate cactus, there’s a multi-tiered fountain, and a second small piece of metal art to the left of the gate and a host of fruit trees and flowers. The gate itself has two wooden swinging doors and a bell in the opening in the door that has a melodious gong sound to announce visitors. The whole thing is topped with an exuberant potato vine in a pretty arch. Details make the difference on this Sonoma County Russian River valley parcel.

Sometimes good opportunities are right in front of you and you just can’t see them. That’s what I was thinking after I got done touring the Foss Creek Villas with Ed Buckner last week. I am usually focused on Healdsburg real estate whether it’s vineyard properties or country land or looking at Victorians on Matheson and Tucker. I’ll also check out anything near downtown Healdsburg since walking distance to the plaza is always a great selling point. Somehow in the midst of all that looking, the fact that Healdsburg has some affordable condos in walking distance to downtown just hadn’t registered.

I’ve looked at the condos at the Grove (just across the street), and they’re very nicely done and brand new, but with prices starting at around $615,000 they’re not a weekend getaway place for everyone. I still think they represent an excellent value, but after seeing what $399,000 to $449,000 can buy at Foss Creek Villas I know where I would buy my Healdsburg getaway place. The $300,000 you save buys an awful lot of great dinners at Cyrus and Dry Creek Kitchen, and that’s one of the main reasons you want to spend your spare time in Healdsburg anyway.

The two bedroom, two bath Foss Creek Villas have been totally redone with new interiors, great landscaping, and garages for the first 25 buyers. The kitchens are high quality with granite counter tops and stainless steel appliances and the finishes throughout are very nice quality. You can find a lot more detail and the full sales pitch at the condo web site, but I wanted to mention the project here just to let my readers know that you can still find excellent real estate values in Healdsburg. I don’t know of any place along the 101 corridor from Sonoma County to San Jose where you can be so close to so many good restaurants for well under $500,000. For the real bargain hunters, Ed told me that two units are being sold for only $399,000.

Of course, these places aren’t just for weekend visitors. This is a great location for anyone working downtown, in any of the Foss Circle business condos, or at the Parkpoint Health Club which is just across the street. It’s hard to get more convenient than this.

As a last word, I think the landscaping people have done a great job. Next time you’re in the area, stop by for a look and say hello to Ed for me.

There are a lot of unique neighborhoods in Sonoma County. Tucked in between Santa Rosa and Windsor and bounded by Old Redwood Highway, Fulton Road, and Highway 101 is a small enclave of about 80 homes. They’re on Mark West Station Road, Donna Road, and Kay Avenue. The streets are laid out in the shape of an H with Kay as the crossbar.

The west end of the area is bordered by vineyards running all the way to Highway 101 and an ecological reserve that is an excellent example of the woodlands and plains that once covered most of the Santa Rosa area.

There’s a big range of home sizes here, from tiny cottages to elaborate, modern houses.
The lots tend to be big with one acre parcels as the most common size.One of the things I like most is the tree lined character of the area with some really terrific oaks. One of the reasons for the health of the vegetation here vegetation health is the high water table. It will flood in the winter when rains are heavy and the ground is saturated. Houses that are at grade level are vulnerable.

I think this is an area poised for improvement and growth. This is a superb location where you could bicycle to work anywhere in the Airport Blvd area of Santa Rosa. The current large lots combined with the modest existing homes represent excellent land values capable of supporting much more highly valued homes. A combination of owners remodeling their homes along with newcomers starting from scratch is likely to change the character of this charming neighborhood.

I just hope that in the rush to build new and better homes we don’t forget to allow for entry level housing for our young population. I was remembering today about the fun I had at age ten working with my dad to build a tree house. It wasn’t as nice as this one, but it inspired me to enjoy the building process.