Inventory Shortage Points to More Stable Home Prices, Fewer Homes to Choose From and Multiple Offers

Posted by Cathy Harrington — April 26, 2012

1336062866Pleasanton, CA. April 26, 2012 A significant decline in the inventory of homes on the market and a growing recognition that home prices may have hit bottom and low interest rates won’t last forever stimulated a sharp year-over-year increase in sales of existing, single-family detached homes across Sonoma County in the first quarter of 2012, according to a report by the research division of Wine Country Group by Better Homes and Gardens Real Estate based on an analysis of MLS data.

Countywide, 1,138 existing, single-family detached homes changed hands during the first quarter of 2011, up 17 percent from 973 homes sold in the opening quarter of 2011. Sales figures would have been higher if not for a limited inventory of properties to attract investors, first-time homebuyers seeking a primary residence and Bay Area homeowners looking for a weekend getaway. Compared with the first quarter of 2011, there were 30-50 percent fewer homes available for purchase – many of them short sales – but far fewer bargain-priced bank REOs.

The number of homes rose on both a quarterly and annualized basis in Cloverdale, Forestville, Penngrove and Petaluma, were up year over year in Guerneville, Santa Rosa and Sonoma, and maintained a steady pace in Healdsburg, Rohnert Park and Sebastopol.

Properties in good condition attracted multiple offers as investors with cash and no contingencies competed against first-time homebuyers with less-attractive conventional mortgages. This strong buyer interest helped stabilize the countywide median home price at $328,027 for the quarter, up slightly from $325,893 in the fourth quarter of 2011 but down 2 percent from $337,098 in last year’s first quarter. Several communities experienced substantive increases in their median sales price on both a quarterly and annualized basis as properties at all price ranges moved quickly. They included Bodega Bay (+30% for the quarter and +37% for the year), Cotati (+.1% and +15%, respectively), Forestville (+35% and +30%), Guerneville (+8% and +25%), Monte Rio (+4% and +116%); Sonoma (+14% and +9%) and The Sea Ranch (+44% and +45%).

Looking ahead to the peak homebuying season, a limited supply of homes on the market points to the potential for a modest increase in home prices. That and strong buyer interest may be what it takes to convince homeowners with equity who have been waiting on the sidelines to put their homes on the market. According to Timothy Hedges, Manager of the Sebastopol office of the Better Homes and Gardens Wine Country Group, “First-time homebuyers will want to have their financial house in order and be patient as they compete against cash offers from investors.” Because the most attractive properties will move quickly, buyers are well-advised to work with a REALTOR® who has local-market expertise.

First Quarter 2012 Housing Market Survey – Sonoma County

Sonoma County

Homes

Sold

Q1/12

Homes

Sold

Q1/11

%

Change

Avg.

DOM*

Q1/12

Avg.

DOM

Q1/11

Change

12/11

(Days)

Median

Price

Q1/12

Median

Price

Q1/11

%

Change

Single-Family Detached

Homes

1,138

 

 

973

 

 

17

 

 

106

 

 

84

 

 

22

 

 

$328,027

 

 

$337,098

 

 

-3

 

 

 

First Quarter 2012 Housing Market Survey – Cities in Sonoma County

Single-Family Detached Homes

City

Homes

Sold

Q1/12

Homes

Sold

Q1/11

%

Change

Avg.

DOM*

Q1/12

Avg.

DOM

Q1/11

Change

12/11

(Days)

Median

Price

Q1/12

Median

Price

Q1/11

%

Change

Bodega

0

 

1

 

-100

 

-

 

19

 

-

 

-

 

$679,000

 

-

 

Bodega Bay

15

 

16

 

-6

 

139

 

151

 

-12

 

$700,000

 

$512,000

 

37

 

Cazadero

5

 

5

 

0

 

263

 

35

 

228

 

$230,000

 

$259,900

 

-12

 

Cloverdale

41

 

36

 

14

 

73

 

115

 

-42

 

$229,900

 

$274,763

 

-16

 

Cotati

17

 

19

 

-11

 

78

 

81

 

-3

 

$315,000

 

$274,900

 

15

 

Forestville

19

 

11

 

73

 

88

 

123

 

-35

 

$273,000

 

$210,000

 

30

 

Geyserville

1

 

0

 

100

 

176

 

-

 

-

 

$450,000

 

-

 

-

 

Glen Ellen

5

 

3

 

67

 

109

 

65

 

44

 

$260,000

 

$860,000

 

-70

 

Graton

1

 

1

 

0

 

26

 

95

 

-69

 

$395,000

 

$325,000

 

22

 

Guerneville

26

 

15

 

73

 

100

 

99

 

1

 

$200,250

 

$159,900

 

25

 

Healdsburg

40

 

42

 

-5

 

153

 

89

 

64

 

$386,000

 

$475,500

 

-19

 

Jenner

0

 

1

 

-100

 

-

 

15

 

-

 

-

 

$320,000

 

-

 

Kenwood

5

 

2

 

150

 

77

 

50

 

27

 

$510,000

 

$522,450

 

-2

 

Monte Rio

8

 

6

 

33

 

25

 

54

 

-29

 

$275,000

 

$127,500

 

116

 

Occidental

2

 

3

 

-33

 

52

 

106

 

-54

 

$411,500

 

$565,000

 

-27

 

Penngrove

10

 

2

 

400

 

108

 

92

 

16

 

$564,500

 

$737,500

 

-23

 

Petaluma

169

 

114

 

48

 

90

 

94

 

-4

 

$340,000

 

$386,250

 

-12

 

Rohnert Park

68

 

69

 

-1

 

68

 

53

 

15

 

$286,000

 

$284,500

 

1

 

Santa Rosa

485

 

417

 

16

 

76

 

71

 

5

 

$295,000

 

$300,000

 

-2

 

Sebastopol

42

 

42

 

0

 

82

 

90

 

-8

 

$394,759

 

$461,050

 

-14

 

Sonoma

88

 

80

 

10

 

93

 

74

 

19

 

$440,000

 

$402,500

 

9

 

The Sea Ranch

12

 

13

 

-8

 

139

 

199

 

-60

 

$625,000

 

$430,000

 

45

 

Windsor

79

 

75

 

5

 

69

 

80

 

-11

 

$320,000

 

$327,400

 

-2

 

Dillon Beach (Marin Co)

 

9

 

 

7

 

 

29

 

 

139

 

 

88

 

 

51

 

 

$517,000

 

 

$468,000

 

 

10

 

 

* Days on market is the number of days a property was listed on the market until it went under

contract at its final listing price. This may not reflect previous listings.

**The median home price for the entire county is the mean of median home prices of

cities within Sonoma County.

Other notes:

The Dillon Beach community in Marin County is served by the Bodega Bay office of Wine Country Group by Better Homes and Gardens Real Estate. It is included for informational purposes and is not factored into the Sonoma County totals. Annapolis, Fulton and Valley Ford recorded no home sales in either Q1 2012 or Q1 2011 and are not included in the chart, although their results are included in the aggregate sales and median price data.

Data are sourced from multiple listing services and are deemed reliable but not guaranteed.

All percentages rounded to nearest whole number.

About Wine Country Group by Better Homes and Gardens Real Estate

Our heritage began with the founding of Mason-McDuffie Real Estate in 1887. In 2010, the company was named the 17th largest real estate services firm in the nation (RIS Media), and Number One in the San Francisco East Bay (SF Business Times). The company provides comprehensive solutions to home buyers and sellers, and handled 7,790 transactions in 2011, generating $2.94 billion in sales. Better Homes and Gardens Mason-McDuffie Real Estate is independently owned and operated and includes joint ventures with partners Highland Partners in Piedmont and Montclair, Wine Country Group Realtors in the North Bay, and Tri-Valley Realty in Pleasanton-Hopyard and Ruby Hill. The organization is comprised of more than 1,400 sales professionals in 26 offices. For more information, go to www.bhghome.com.

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