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Average Sonoma Home Prices

Sonoma County Home Sales Prices chart since 2000 — Sonoma County Home Sales Prices 2000-2022

Rising home prices are a popular topic for homeowners. Not so much for renters and others trying to buy property in a challenging market. This century witnessed prices plummet in 2008 after the financial crisis. Since the market bottom in 2011 prices have shown a steady rise year over year. Covid helped shape a new market. Working from home ballooned into the primary way office workers did their jobs. Attractive locations with low home prices relative to San Francisco and the Peninsula took off in value. Last year saw record increases in prices.

Rising interest rates make the recent price increases challenge the real estate market. A useful tool from the California Association of Realtors called the affordability index shows that only 18% of California households could afford to buy the median priced home in the 3rd quarter of 2022. It hasn’t gotten better.

Prices and interest rates are going to be the story of real estate for the foreseeable future. The steady increase of home prices over the last decade is over for now. Sellers are going to have to accept that they will not get the record breaking prices their neighbors may have gotten in 2022. Until interest rates stabilize at more affordable levels, buyers will have to accept that their choice of homes will have a lower price ceiling.

Luxury Homes in Sonoma County

Sonoma County continues to be a favorite destination of smart buyers willing to pay a premium price for the wine country lifestyle. Many are successful and financially prudent Bay Area residents looking for second homes that will turn into their primary residence when they retire. Other highly-qualified buyers are looking for an additional residence or vineyard to add to their real estate portfolio for long term appreciation. Whatever their motivation, luxury can mean many things. For some, selecting the highest quality building materials is essential. Others might care less about finishes, but define luxury as a perfect location with wonderful privacy. Subjective reasons like this are important factors that drive buying decisions, but for our purposes, selling price is a convenient and objective marker for luxury. For 2022, we used $4,000,000 as the bar separating luxury homes from the rest.

Sonoma was the hottest spot for luxury property selling for over four million dollars. The town of Sonoma area accounted for 18 sales in that price range last year. Buyers appreciate Sonoma for the reasonable commute to San Francisco, the charming square, exceptional vineyards, and fascinating history. The map of luxury sales clearly demonstrates the attraction of Sonoma’s east side.

sonoma luxury home sales map showing east side of sonoma with the most luxury sales — Sonoma Luxury Home Sales for 2022

Healdsburg was also a strong contender for Sonoma County luxury property transactions with 11 properties selling for more than four million dollars. Healdsburg’s attractions to all market segments include great restaurants, a world renowned town plaza, three of the wine country’s premier appellations, and a host of local merchants dedicated to serving the public. What’s apparent from the Healdsburg luxury sales map is that country property dominated the luxury market with relatively few sales inside the city limits. Luxury, to Healdsburg buyers, appears to include acreage and vines.

Healdsburg luxury home sales map — Healdsburg Luxury Home Sales

An important factor to keep in mind as you look at Sonoma luxury listings on the properties linked below is that in this context luxury refers to selling price, not home quality. In many of the listings, the house may be an insignificant part of the overall value of the property, particularly on the large acreage and vineyard parcels. In addition, with the older housing stock typical of Sonoma and Healdsburg, even well built homes that were considered to be outstanding in their early years may have fallen on hard times due to deferred maintenance or simply failure to upgrade.

The most elusive property on the Sonoma County market today is a luxury contemporary home. There aren’t very many of them around to begin with, let alone as active listings. There were five homes constructed in 2022 that qualified as luxury. Three from 2021. None from 2020, and just one from 2019.

The shortage of wonderful, contemporary luxury homes may soon lead to an increased demand for buildable parcels as buyers decide the best way to get a great home is to build their own.

Sonoma Homes over $4,000,000

Healdsburg Homes over $4,000,000

Sonoma County Four Million Dollar Homes

Sonoma Country Property Fuels Dreams

Country living has a vivid place in the American imagination. You might be toiling in a cubicle today, but in your heart you are already planting the deep, rich beds of asparagus that you’ll be eating in your retirement. While you answer the next call stacked up in the queue, you can just feel the sunlight on your face as you and your significant other sip wine on the rustic porch overlooking the small vineyard…next to your chickens and olives and roses and beautifully manicured raised beds.

Sonoma County Chickens — Necessary ingreditent for country dreaming

I know that dream. I love that dream. I sell that dream.

I’m the guy who knows how deep to dig the asparagus bed, how to prime your well pump, and which septic guy to call when you need help. I’m the one who can help you find that small dream property that pops into your head whenever work gets a little too boring or urban life starts to wear on you. That’s when you need your Sonoma County real estate agent (me) to send you a few new listings to start dreaming about.

If you’re looking for an old apple orchard or a new vineyard in west Sonoma County, this link to homes with one to five acres in Sebastopol might keep you dreaming for weeks. If you want a Sonoma country property a little closer to the famed Sonoma square, try homes with one to five acres in Sonoma. If you’re ready for the foodie-inspired wine country lifestyle, go for broke and check out some one to five acre Healdsburg properties or the larger Healdsburg homes with six to twenty acres. Healdsburg has fewer small parcels than Sonoma and Sebastopol, but if you’re looking for a place to park your IPO proceeds, Healdsburg has beautiful properties available.

For the architecturally inclined dreamers, starting with bare land (or bare plus roads plus water plus septic plus fences plus high speed internet) might be the way to go. Foreclosed land in the north bay didn’t exist six years ago, but today there are dozens of REO “lots and land” properties for sale in Marin, Sonoma, Napa, Mendocino, and Lake county. Sometimes the prices aren’t as low as buyers might expect from the bank owned status, but a savvy agent can help you get the best price for the land you want.

As the song says, “don’t stop thinking about tomorrow.”. There’s room in everyone’s head for a small place in the country. The lucky and hard working alike have a chance to move it from their head into the real world. When you’re ready to get serious about finding and buying your country place, please get in touch. In the meantime, those links are there for dreamers. Even real estate agents have country property fantasies…

Update:

I would be remiss not to mention the fantastic blog about an urban transplant moving to Sonoma County for chickens… She doesn’t have big acreage, but she’s got chickens, a great garden, bees, and wonderful stories about all of it.

Sonoma Residential Prices

Knowing residential pricing trends makes you a smarter buyer. Period. Whether you’re chasing an REO investment or competing against multiple offers for your personal dream house, you need to know what other people are doing. Real estate brokers and agents are very good at protecting the confidentiality of their current offers, so the only way to get a sense of the market is to look at recent history.

Sonoma residential discount by sale condition — Sonoma Residential Discounts by Sales Condition

This chart for the city of Sonoma shows the results of the first six months of 2011 broken down by whether the property is an REO, short sale, or open market sale (indicated by NONE). The scale on the left shows what percent of the listing price was paid by the successful buyers. Any column taller than the 1.0 mark indicates buyers are paying more than asking price.

What we see is a very strong performance by REO properties during the first half of the year. In June the average price for a sold REO property was nearly 4% over the listed price. You don’t have to be a rocket scientist to understand that buyers are waking up to the fact that prices are probably about as low as they are going to get. Unexpected shocks to the economy may change that, but we have seen pretty stable pricing for several years.

Sonoma Average Home Sales Price 2006-2011

This chart tracks home sale prices for the last five years. You can see the dramatic decline that reached bottom in February of 2009. Since then prices have been more or less stable with the normal fluctuation you will see in a market with limited sales and the occasional mansions or luxury estates tossed in to skew the average.

In addition to the excellent performance of REO properties in Sonoma during the first half of 2011, open market sales and short sales have also done reasonably well. They are being discounted from the asking price, but the modest discounts are in the range of around 4% to 5%. When you are planning to make an offer on any property in Sonoma County, knowing the recent history of pricing discounts will help you make an intelligent offer.

If you are interested in an analysis of another area or a specific property, please talk to your agent. If you don’t have an agent, I’m happy to offer my services.

Sebastopol Residential Sales

Sebastopol home sale volume - 6 month intervals — Sebastopol Home Sales 2006 through June 2011

Sebastopol recorded 24 residential sales in June which helped bring the first half of 2011 to a close with 102 homes sold. That matches nearly exactly the figures from the first half of 2010, but without the First Time Home Buyers Tax Credit that drove many buyers into the market in 2010 in search of tax credits. This year we also have a more challenging lending environment with tough qualifying standards and higher down payments required more frequently.

Sebastopol residential sales by REO, short sale and open market sales — Sebastopol Monthly Sales by Sales Condition

The mix of REO, short sale and open market sales (shown as NONE in the charts) varied significantly from month to month so far this year, but the samples size is too small to draw any useful significance. It’s enough to note that Sebastopol home sales include mainly open market and REO sales with a decent proportion of short sales thrown into the mix.

One of the anomalies of Sebastopol that has persisted for years is a slower reaction to the housing bubble bursting than the rest of the County. Most other cities in Sonoma County showed significant valuation declines until early 2009 and have maintained a reasonably stable price plateau since then. Sebastopol, on the other hand, maintained bubble-level pricing somewhat longer and has continued to search for a market bottom.

To illustrate this, please look at the Sonoma 2006-2011 chart and find the first month that the average price dropped below $600,000 and then find the same price drop in the Sebastopol chart. (For non-chart-followers, it was August of 2008 for Sonoma and not until March of 2009 for Sebastopol. Prices in Sonoma fell all the way under the $400,000 barrier for several months in that early 2009 time frame, but have since recovered and haven’t tested the $400,000 floor again since then.

Sebastopol Average Home Sales Price 2006-2011

Sebastopol, on the other hand, continued to have price declines after spring 2009 and has had several months in the first half of this year with the lowest numbers in the five years of the chart’s time frame. I have a few ideas why Sebastopol remained strong early, but is currently a softer market than Sonoma, but I don’t think anyone has a definitive answer.

In any case, Sebastopol home sales closed out the first six months of the year in strong fashion. I expect this desirable town will continue to have a strong real estate market. Great schools, charming country properties, and a pleasing climate all add to the charm of Sebastopol and make it a must-visit town for prospective Sonoma County home buyers.

Average Sonoma Home Prices

Luxury Homes in Sonoma County

Sonoma Country Property Fuels Dreams

Sonoma Residential Prices

Sebastopol Residential Sales

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