Has Sonoma County Real Estate Hit Bottom? (from early 2008)

Residential Sales Sonoma County 2004 to 2008I 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.

Sonoma County Residential SalesThe 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.

7 thoughts on “Has Sonoma County Real Estate Hit Bottom? (from early 2008)”

  1. Nicely done site but those graphs are a bit toooooo small for this aging baby boomer and even smaller than my 19 year old assistant could read!!! Perhaps a link to the graph would be better!!

  2. I am interested in seeing any specific information you might have on Santa Rosa, either single family homes or the duplex or four plex market.

  3. I have added the Sonoma County Residential Sales link to the top graphic. Click on that for a view of residential sales statistics for Sonoma County since January of 2004

  4. I am interesting in SFH in Sonoma. I’m actively looking at the moment and think your aggregate on Sonoma County is brilliant. Thanks for the hard work!

  5. We don’t know how far the housing bubble in U.S. will go. But that’s a different subject.
    I used these great Realtors Peter and Karin Narodny at marinrealestate . net. They helped in all aspects of me buying my house. They have over 30 years of experience in real estate field and are very professional.
    [editor: nice sales pitch. I have left the key URL information there but unhooked the link. Interested readers should be able to figure out how to get to the site]

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