Sonoma County Housing Prices Continue to Rise as Inventory Sinks

Sonoma County Housing Prices Continue to Rise as Inventory Sinks

GTG Financial, Inc
GTG Financial, Inc
Published on May 7, 2018

Sonoma County Housing Prices Continue to Rise as Inventory Sinks

When there is less of something that more people want, prices can increase.

It doesn't really matter what the "something" actually is. With greater demand and a shrinking supply, sellers can demand and get higher prices for the very same item. And nothing holds more true as it relates to real estate and especially so here in Northern California.

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In Sonoma County for example, housing inventory is at its lowest level in more than 25 years. Recent data for Sonoma County showed only 414 single family homes listed for sale at the end of January.

Historical market demand for housing in the area has always kept prices on the rise, except of course near the end of 2008. Since that tumble though, home prices have risen even higher than they were prior to the burst of the real estate bubble. To compound these prices, last fall's fires has contributed greatly to the housing shortage.

Only 414 single family homes listed for sale at the end of January 2018.

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Owners of these homes who are thinking about selling must also face the same situation. If they're going to sell a property in Sonoma County and buy a property in Sonoma County, they're likely to face the same situation as their buyers. Classic, “SELL HIGH, BUY HIGH” situation.

The median price for these homes increased by 16 percent year over year to $670,000. The median price in February 2009, just nine years ago, hit a low of 305,000. Homes today are worth twice as much in nine short years.

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Beautiful Sonoma County

There are various efforts on the state and local levels that are attempting to build more housing across the spectrum but getting a new development approved, permitted and completed can take a year or more. If you're thinking of buying in Sonoma County or anywhere in Northern California for that matter it's probably time to make the move.

Homes today are worth twice as much in nine short years.

In addition to an increase in home values is the expectation of higher financing costs later in the year. Interest rates in general have been on a gradual move higher over the past couple of years and while the Fed didn't make any moves at their January meetings there is still an expectation of at least two or maybe three more increases to the Federal Funds rate by the end of this year.

If both trends continue, it will simply cost more both in terms of price as well as a mortgage payment. If there ever was a time to buy a home in Northern California, it might be now. There really isn't anything on the radar indicating a reversal of these important trends.

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