Sonoma County homes sales slowed in September as fewer investors and other buyers hunted for properties.
Buyers purchased 394 single-family homes last month, according to The Press Democrat’s monthly housing report compiled by Pacific Union International Vice President Rick Laws. September sales decreased 22 percent from August and 5 percent from a year earlier.
Demand remains healthy, but “we’re not red hot any longer,” said Tim Freeman, manager of Coldwell Banker in Santa Rosa.
The county’s median price rose 2 percent from August to $451,000. The median has increased 27 percent from September 2012, when it was $355,000.
Each summer the housing market typically slows about the time school begins in August.
This September fewer investors were looking for houses, brokers said. One reason may be that the jump in home prices has made it more difficult to find properties that would make sound rental investments.
Whatever the reason, many homes now are attracting fewer buyers.
“You don’t see 15 offers on a property anymore,” said Shawn Hermosillo, an agent with Keller Williams in Santa Rosa. “You see one to three offers, or no offers.”
The lack of offers often occurs when sellers make their asking prices higher than recent comparable sales.
“The buyers are smart, and they know if something’s not priced right,” said Brian Connell, a broker/manager for Frank Howard Allen in Santa Rosa.
The county real estate market is enjoying its second straight year of increased dollar volume after six years of decline.
During an unprecedented real estate bubble, the county’s median price soared to $619,000 in August 2005, then crashed to $305,000 in February 2009.
The market finally turned a corner last year when single-family home sales exceeded 5,000 for the first time since 2005. And last April the median price exceeded $400,000 for the first time in nearly five years.
For the first nine months of 2013, buyers have purchased $1.9 billion worth of houses and condominiums, an increase of 14 percent from a year earlier.
Part of the jump in the median price is due to an increase in sales of more expensive homes.
This year sales of houses priced under $400,000 have declined 38 percent. In contrast, sales have increased 48 percent for houses priced above that amount.
Sales jumped in a variety of the upper-end price ranges. For example, so far this year the county has recorded 241 homes that sold for more than $1 million, a 39-percent jump from a year earlier.
A 1-percent rise in mortgage rates this summer probably had some dampening effect on sales, agents and brokers said. As well, buyers this fall may be feeling uncertainty on everything from the Federal Reserve’s plans for future interest rates to the federal government’s partial shutdown and the ongoing battle over raising the nation’s debt ceiling.
Some buyers are facing delays in closing escrow due to the government shutdown. The reason is their lenders can’t get access to needed IRS tax data.
“I know for sure there have been some hiccups,” said Glenn Gephart, general manager and an owner of Century 21 Alliance in Santa Rosa.
However, other lenders are finding ways to keep processing loans, brokers said, some by temporarily approving mortgages without verifying the borrowers’ tax returns.
September ended with nearly 900 homes available for sale, slightly more than a two-months supply of inventory at the current pace. That remains considerably less than the roughly six-month supply that experts say is needed for a balanced market.
The median sales price is expected to rise in the coming months partly because the inventory of starter homes has fallen sharply during the past two years. Thus, the mix of homes likely will keep shifting toward more expensive properties, whose availability is relatively unchanged.
The county recorded only 298 single-family homes for sale at the end of September that were priced under $500,000. That amounts to a decline of 40 percent from a year earlier.
In contrast, the county had more than 1,100 homes available for sale in that price range at the end of September 2011.
Even though the sales pace has eased, the rise in prices and the shortage of available homes still makes the market attractive for sellers, Laws said.
“We still have more buyers than we have inventory,” he said. “And that’s the bottom line.”
– Robert Digitale