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On September 10, 2019

Sonoma County Real Estate September 2019 Report

Home Prices by City; Short-Term & Long-Term Appreciation Trends; Migration In & Out of County; Price Reductions; Unsold Inventory.

Home Price Appreciation Trends –
Selected Sonoma County Markets

Home Prices by City

People Moving In & Out of County

Using new U.S. Census estimates released 8/29/19, this chart attempts to identify U.S. counties, states and international regions with the highest number of residents migrating to and from our county. In the Bay Area, there is a general trend outward from more expensive to more affordable places, while in-bound migration is deeply affected not only by exchanges between Bay Area counties, but people arriving from other parts of the state, country and world. Areas often have large two-way exchanges of residents – such as between Sonoma & Marin Counties.

Short-Term & Long-Term
Median Home Value Trends

As generally seen in the city price trend charts at the beginning of this report, Sonoma County median home values have ticked down a little, comparing 2019 YTD with 2018. However, in August, the monthly median house sales price suddenly jumped to just a tad below the peak in June 2018. It should be noted that monthly prices are subject to anomalous fluctuations and that longer-term trends are more meaningful.

Selected Market Statistics

The chart below compares supply, the number of active listings on the market, with demand, as measured by the number of sales. This is a seasonally adjusted graph that smooths out normal monthly fluctuations to provide clearer historical trend lines. As context, the data below begins in 2013, after the market recovery was already well underway. If the data went back to the 2009 – 2011 period, during the post-crash market recession, the divergence between the two lines would be much, much greater than at any time illustrated here.

Generally speaking, the percentage of active listings undergoing price reductions spiked in mid-2018 and has remained somewhat elevated since then. The big factor behind the spike was that the late 2017/ spring 2018 market was extremely hot, with year-over-year appreciation rates and home prices jumping. When the market began to cool off, sellers and listing agents – relying upon recent sales data to set new listing prices – were wrong-footed by the significant softening in supply and demand dynamics. Sometimes, it takes a while to adjust pricing to changing market realities.

The next chart measuring unsold inventory helps give greater context to market conditions and changes. The ups and downs since 2012 are relatively minor compared to the situation that prevailed during the 2008-2011 market recession, when the amount of monthly unsold inventory soared.

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