Sonoma County home sales rose last month to their highest level in nearly three years, as more owners who still had equity in their houses agreed to sell.
In the last three years, these so-called “equity” sales have become a larger part of the county housing market, even as the number of foreclosures has significantly declined, according to The Press Democrat monthly housing report compiled by Coldwell Banker manager Rick Laws.
But while more owners with equity are selling their properties, they have been forced to accept lower prices for their homes. Prices for these homes have fallen even as the median price for foreclosures has remained flat.
For the equity sales, Laws said, “we’re seeing prices come down and sales increase.”
Real estate brokers said the increase in such sales suggests that more homeowners have decided to sell after concluding that prices aren’t likely to rise significantly any time soon.
“I think people are finally digesting the new reality,” said Stephen Liebling, the Coldwell Banker manager in Sebastopol.
In August, owners sold 460 single-family homes in the county. It was the best sales month since October 2008, when 512 houses were sold.
Last month’s sales were up 13 percent over July and 15 percent higher than a year earlier.
The median price held steady at $330,000, up 2 percent from July, but down 11 percent from a year earlier. For all sales from the first eight months of the year, the median home price is $325,900, down 8 percent compared to the same period in 2010.
Home prices peaked in the county in the summer of 2005, when the median hit $619,000, before plunging to $305,000 in February 2009.
But a new analysis by Laws shows the difference between what happened for the sales of foreclosures and equity homes. It suggests that equity sales have contributed more than foreclosures to the decline in prices in the last year.
The prices paid for foreclosure homes have remained fairly stable over the past three years. For the 12-month period ending in August, the median dipped to $268,000, down just 2 percent from the same period ending in August 2009.
However, people selling homes with equity have seen prices fall far more sharply over the last three years. For the 12-month period ending in August, the median tumbled to $407,000, down 15 percent from the same period ending in August 2009.
As prices weakened, equity sales have become a larger part of the local real estate market. Fifty-two percent of the homes sold over the last 12 months were equity sales, up from 38 percent for the same period in 2009.
Foreclosures, meanwhile, have become a smaller part of the market, accounting for 28 percent of sales in the last 12 months, down from 38 percent during the same period in 2009.
Short sales, where homes are sold for less than the amount owed on the mortgage, have remained fairly stable. They accounted for 20 percent of sales in the last 12 months, up from 16 percent from the same period in 2009. The median price was $329,000 for short sales occuring over the last 12 months, up 5 percent from the same period in 2009.
— Robert Digitale