For the first time since housing prices crashed, the rate of distressed home sales in Sonoma County has fallen to single digits.
Just 9 percent of the single-family homes sold here in October were foreclosures or short sales, according to The Press Democrat’s monthly housing report compiled by Pacific Union International Vice President Rick Laws. A year ago such properties made up 29 percent of county sales.
Buyers purchased a total of 430 single-family homes in the county last month, a decrease of 13.5 percent from a year earlier.
The median price rose to $466,750, an increase of 3.7 percent from September and 27.2 percent from a year earlier.
Distressed sales peaked at 76 percent in February 2009, the low point in a historic housing crash.
By August 2005 the county’s median price had reached a record high of $619,000. But prices began a steady slide in the last half of 2007, and in 2008 a record 2,800 county homes were lost to foreclosure.
The properties that were repossessed by banks, known as real estate owned or REO, flooded the market, and the median price fell in February 2009 to its lowest level of the crash of $305,000.
Prices “just fell way too far for what the properties should have been. And it was simply because of the REO competition,” said Diana Blakeley, the owner/broker of Wine Country Real Estate Network in Cloverdale.
Foreclosures and short sales have seemed a fixture of the market for the past five years. Until June 2012 the rate of distressed sales never fell below 40 percent.
To many experts, the market has turned a corner, even if a full recovery has yet to occur.
By last year the county’s 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.
Such measures as foreclosure activity, cash sales and investor purchases “are now trending toward normal,” said John Walsh, president of DataQuick, a San Diego-based information service.
“We are still a ways away, but the market is slowly re-establishing equilibrium,” Walsh said.
For the entire Bay Area, buyers in October purchased 7,595 houses and condos, a decrease of 3.9 percent from a year ago, according to DataQuick.
The median price for those homes was $539,750, an increase of 29.7 percent from October 2012.
Distressed property made up about 14 percent of Bay Area sales last month, compared to about 35 percent a year ago, DataQuick reported.
Short sales refer to transactions where the home is sold for less than the amount owed on the mortgage.
— Robert Digitale