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The Latest on the Sonoma County Housing Market

Posted on July 17, 2019 by Admin

As reported in the Press Democrat, July 17, 2019

When Paul Saharoff tried last year to sell his Santa Rosa home on Alta Vista Avenue for almost $1 million, Sonoma County’s red-hot housing market already had started to cool.

From late March to June 2018, Saharoff, 77, couldn’t get any buyers for the home he’d owned for 33 years. “I could feel the market braking,” Saharoff said. “It was also breaking my heart.”

Finally, he’s set to close a deal to sell the 3,228-square-foot, four-bedroom house. Saharoff cut the asking price by about $75,000 to put the house within a buyer’s reach and was helped by lower mortgage interest rates.

At the halfway mark of 2019, the county housing market remains somewhat sluggish. The median single-family home price in June was $658,500, a sharp drop from the all-time record $700,000 median in June 2018, according to The Press Democrat’s latest monthly housing report compiled by Rick Laws of Compass real estate brokerage in Santa Rosa. Meanwhile, there were 422 houses sold last month compared with some 429 home sales last June.

Through the first half of the year, there have has been 2,000 single-family homes sold countywide, a 6.45% decline from the comparable period last year when 2,138 homes were sold.

 

 

Last year, the local housing market was fueled by post-wildfire demand, which caused a price spike and a surge of sales. After shifting downward during the second half of 2018, the market has leveled off this year and buyers are slowly coming off the sidelines looking to use their leverage to get a good deal, real estate experts say.

“Right after the fires, we had a spike in prices even though the interest rates were going up. That is not a normal market,” said Erika Rendino, the real estate broker who helped Sarahoff sell his house.

Rendino, co-owner of Re/Max Marketplace in Cotati with her husband, real estate agent David Rendino, said at the start of 2019 interest rates began to decline and have continued that trend. But Rendino and other local real estate experts say buyers still are spooked from last year’s record-high pricing and many still haven’t realized that they can get more house for the same downpayment.

David Rendino said it’s going to take buyers at least three more months to realize they now have more “buying power.” It’s not technically quite a buyer’s market, but it’s leaning toward buyers, he said.

“The lowering of interest rates has given some buyers the opportunity to purchase homes previously out of reach,” he said, adding that every ¼ of 1% decrease in interest rates roughly translates into a $10,000 increase in purchasing power.

Ross Liscum, a Santa Rosa real estate broker affiliated with Century 21 NorthBay Alliance, expects low interest rates to continue boosting housing market activity in the coming months.

“It feels like we’re experiencing what we had in the past,” he said, referring to pre-fire housing activity. “For properties that come on the market that show nicely and are priced competitively, we’re seeing offers within the first week or two,” Liscum said. “You have better buying power. You can buy more home with a lesser payment than you could have last year.”

Otto Kobler, a mortgage broker and branch manager of Summit Funding in Santa Rosa, said Monday current interest rates for conventional fixed-rate 30-year mortgages were roughly 3.99%. Meanwhile, 15-year fixed mortgage rates were about 3.30%.

Kobler said high interest rates last year were part of the reason the area housing market slowed after last summer’s peak in prices. He said buyers that calculated their purchasing power based on last year’s interest rates have not readjusted to today’s lower rates.

“They’re just not really hearing it,” he said. “We bottomed out with rates last week. I wouldn’t be surprised if rates move up a little bit more maybe by next week. They do move around quite a bit.”

Low mortgage interest rates, notwithstanding, there are a number of factors in the local economy keeping potential homebuyers from entering the housing market.

Jordan Levine, deputy chief economist California Association of Realtors, said although lower interest rates make mortgage payments more affordable, overall home prices remain too high for many Californians.

“Affordability is already at the point where two-thirds of Californians can’t afford the median price home,” Levine said.

There’s also a great deal of uncertainty about the current 10-year economic expansion, he said. Though not as robust as previous expansions, it is the longest in American history.

“That brings with it fears about whether that can be sustained,” Levine said.

And the available supply of homes for sale is “still very low from a historical standpoint,” he said. Statewide, there’s an inventory equal to 3.4 months of sales, whereas for several decades before the 2008 recession the available home listings in California were equal to six months of sales, he said.

Dave Corbin, broker with HomeSmart Advantage Realty in Santa Rosa, said although the number of home sales in Sonoma County has declined by 15 during the first six months of the year the total value of those sales is $5 million higher than the six-month stretch a year ago.

In the first half of 2018, Corbin’s agency represented 72 buyers and 47 sellers. This year, he said, the agency thus far has represented 63 buyers and 41 sellers.

“I’d rather see a lot more units sold,” he said. “It’s just a little harder to come by in terms of listings this year but we’re still doing all right.”

The general consensus locally among homebuyers and sellers is that the housing market is “cooling,” David Rendino said. However, he said that perspective comes from comparing the current market to a six-month period in 2018 that was historically abnormal.

“The reality is that with this interest rate (on mortgages), it’s actually changing into a more balanced market,” he said.

You can reach Staff Writer Martin Espinoza at 707-521-5213 or martin.espinoza@pressdemocrat.com. On Twitter @pressreno.

Puerto Vallarta….The Friendliest City in the World

Posted on January 17, 2019 by Michelle

This year my wife Connie and I did something a little different for the Christmas holidays….we left the country and took a sojourn to the beautiful Mexican beach resort city of Puerta Vallarta. Once we landed, we headed North from the airport to the small town of Lo de Marcos and spent ten wonderful days leisurely swimming, bird watching, hiking and sight-seeing. It was both relaxing and educational. Here’s what we learned about “Vallarta”:

  • The town we stayed at is called Lo de Marcos
  • It’s an amazing area for bird watching
  • It has a truly authentic Mexican feel with friendly people and feels “safe”
  • It’s a popular retirement destination for Americans and Canadians
  • PV is known as a “satellite gay space” for LGBTs
  • Yoga on the beach is popular and fun, especially during sunset!
  • It has a lovely tropical climate, but not many hurricanes
  • There are crocodiles!
  • It’s a popular tourist destination for folks like us who want a laid-back, non- commercialized experience
  • It has extinct volcanoes and occasional earthquakes
  • It’s not filled with luxury resorts!
Left: Connie viewing extinct volcano Right: Beautiful Puerta Vallarta Coastline

We were lucky to be staying in a private residence provided by friends. This was our first time not spending Christmas with our two daughters, both of whom were sailing the Sea of Cortez on a rented catamaran with assorted spouses and friends, a trip which they all survived and had great fun doing.

Meanwhile, our time in Lo de Marcos was everything we hoped it would be and helped soothe the sting of Empty Nest Syndrome! I highly recommend it as a great “must see” to put on your bucket list.

–Mark Stevens, January 2019

Left: Connie and I send off our lighted luminario over the ocean on New Year’s Eve….a beautiful Mexican tradition. Right: Yoga on the beach at sunset….fun!

 

 

Pearl Jam & Pinot Noir

Posted on July 31, 2018 by Admin

Photo by Kevin Mazur/Wire Images/Getty Images

Well before it was considered rock ‘n’ roll to own a wine collection, Pearl Jam frontman Eddie Vedder proudly popped and partook of Pinot right there on stageduring concerts. And in the years since the band’s breakout 1991 album Ten, the Seattle area has become as famous for its winemaking scene as its grunge scene. No surprise then that the band has tuned up a new charity label with winemakers in Woodinville, Washington’s eno-punk Warehouse District to celebrate next month’s Home x Away concerts and raise money for the Vitalogy Foundation, Pearl Jam’s Seattle homelessness awareness and relief charity.

The Home x Away limited-edition box set of reds is a release from the Underground Wine Project, a collaboration between Washington winemakers Mark McNeilly of Mark Ryan Winery and Trey Busch of Slight of Hand Cellars; each bottle of the Idle Hands Syrah/Cabernet cuvée sports a label design by Pearl Jam depicting a retro-futuristic skyline silhouette of one of the four cities along the Home x Away tour kicking off next month, including Seattle, where the Aug. 8 and 10 “Home Shows” mark the band’s homecoming after five years since last playing Jet City—and, reportedly, the biggest concert series the city has seen in more than three decades.

“We have been longtime fans,” McNeilly told Unfiltered of the project. “Trey and I have met [Pearl Jam] band members over the years at different things, and we have worked with them a little bit with some of their charities, but it’s just fun to be pulled in a little bit closer for a great cause. I think that if we can work with Pearl Jam and find some new arenas to talk about philanthropy and talk about people’s responsibilities toward charity, you can kind of open people’s eyes and let them know everybody has a responsibility to help everybody else.”

All the proceeds of the 450 cases sold went to the Vitalogy Foundation. That’s right, the new wine, alas, has already sold out—within 15 minutes of the band announcing the project via its email newsletter. But for the homers in the Seattle area, 10 of chef Ethan Stowell’s restaurants that snapped up some of the wine will be selling it by the glass, with further proceeds going to charity, starting Aug. 1, in the lead-up to the Seattle gigs. Pearl Jam’s partnership with the Underground Wine Project is one of many surrounding the Home Shows with a goal of raising $960,000, with each donation made to the Vitalogy Foundation to be matched by the band.

–story courtesy of Wine Spectator

Veraison, Smoke Taint & Napa Vineyards

Posted on July 04, 2018 by Admin

© Daily Republic | The fire started in Yolo County and is already bigger than the Tubbs fire that ripped through Napa and Sonoma last year.

As most of you know, Napa is on fire.  Again.  And those in the “know” in regards to wine are busy postulating on the effects of smoke taint as it relates to “veraison.”  Is smoke taint becoming a thing with wine? Too early to tell and certainly interesting speculation for wine conversation.

Meanwhile, what is the meaning of the cryptic term “veraison?”  Veraison is defined this way:  “In viticulture (grape-growing), veraison is the onset of ripening. The term is originally French (véraison / veʀɛzɔ̃), but has been adopted into English use.” (Wikipedia).  Veraison has everything to do with the permeability of the grape skin.  Less ripened grapes have thicker skins, which suggests they are less susceptible to smoke taint.  That’s where we are right now, in the early part of the grape ripening season, so most likely smoke taint will not be a factor for the current fire.

Here’s more about the current fire affecting Napa County, courtesy of W. Blake Gray | Posted Tuesday, 03-Jul-2018:

Growers are keeping an anxious eye on two large fires in Wine Country

A huge wildfire has crossed over into Napa County, less than a year after the region was devastated by one of the worst fire outbreaks in northern California history.

The air was brown in San Francisco, about 60 miles south of Napa County, on Sunday morning from smoke from two Wine Country fires: the County Fire, which started in Yolo County east of Napa, and the Pawnee Fire in Lake County north of Napa.

The County Fire is growing like Godzilla: 60,000 acres as of Monday evening, with only 5 percent contained. It is already larger than the Tubbs Fire that last year devastated northern Napa Valley and neighboring Sonoma County, and it is growing at a faster rate – 33 percent on Monday alone. Cal Fire believes it started in dry vegetation; the cause is under investigation.

However, some of the news on the County Fire is so far, so good (cross fingers). CalFire says it threatens 700 structures – six times as many as 12 hours earlier – but so far has not destroyed any. At this point, no wineries are believed threatened, and we learned last year that vineyards are effective natural firebreaks.

“I’ve looked at the map many times here. It’s not anywhere in our grapegrowing vicinity,” Heidi Soldinger, marketing and communications manager for Napa Valley Grapegrowers, told Wine-Searcher. “At this time, we’re feeling like we’re pretty safe. But after what we experienced in October, I’m not going to make any predictions.”

For wineries, smoke taint is almost as big a concern as the fire itself. California wineries have had great interest in smoke taint research since last year’s wildfires.

Napa’s grapes have not yet gone through the process of veraison, where white grapes turn black, so they are less vulnerable to smoke taint than they will be soon. But that doesn’t exempt them from risk. In 2008, Anderson Valley Pinot Noir grapes were heavily smoke tainted by fires that occurred pre-veraison in June.

“We do not currently know exactly how much fresh smoke is needed for a real risk of smoke taint development in the wine,” Anita Oberholster, assistant cooperative extension specialist for UC Davis Department of Viticulture and Enology, told Wine-Searcher. “However, we do know that pre-veraison it will take more fresh smoke and longer exposure times for smoke taint risk compared to post-veraison grapes. The less ripe the grapes, the smaller the risk. Green hard berries have low risk whereas larger, softer, green berries have medium risk, with post-veraison grapes having the highest risk.”

Fortunately, though the County Fire has leapt into Napa County, it is still north and east of Napa Valley, and the wind in Napa County tends to blow from the ocean (west) to east. Winds can change, and fires can leap, but for now it’s a worry for wineries more than a threat.

To the north of Napa, however, the Pawnee Fire has already destroyed 22 structures in Lake County. It’s only one-third the size of the County Fire, and it was 75 percent contained as of Monday morning. The cause of this fire is also under investigation.

It’s possible this fire might have more impact on 2018 Napa Cabernets than the County Fire, because much of the Cabernet Sauvignon grown in Lake County finds its way into Napa Valley bottlings. A wine labeled as “Napa Valley”, or any other AVA, must contain at least 85 percent grapes from that AVA. Lake County Cabernet grapes fetched an average of $2500 per ton last year; for Napa County Cabernet, the average was $7500 per ton. It’s also possible that the great majority of Lake County grapes won’t be affected at all.

California usually has dry summers – that’s why the wine is so good – and is thus vulnerable to fires. This season they seem to be early. The state had below-average rainfall again last winter after a rainy winter in 2016-17 ended a five-year drought. But rain might not matter: in 2017, after that wet winter, more than 500,000 acres burned in California, more than double the destruction of dry 2016.

Wednesday July 4 is the biggest fireworks day of the year in the US. Not, however, after last year in wine country.

“In Napa County we’re not having any fireworks this year,” Soldinger said. “Everyone is very aware. Our thoughts go out to everyone in Yolo and Lake County. We know how that feels.”

North Bay Wildfire Clean Up Complete

Posted on June 14, 2018 by Admin

 

State and federal officials Monday declared the debris removal from the North Bay wildfires — the largest such effort since the 1906 earthquake — complete.

The government sponsored cleanup work in Sonoma, Napa, Mendocino and Lake counties has been winding down for months as the number of sites remaining to be cleared has dwindled. The last of the 4,563 parcels that signed up for the cleanup program was cleared last week.

The North Bay wildfires were the costliest in U.S. history, with insured losses approaching $10 billion. They also killed 40 people and destroyed 6,200 homes. That work that resulted in an estimated 2.2 million tons of ash and fire-related debris being hauled off. In the case of concrete from foundations, some was recycled, while much of it was buried in the Sonoma County Central Landfill.

Michael Wolff, a contractor whose firm has cleared more than 150 sites and assisted in hundreds of others, said while initially skeptical of the timeline, he was impressed with the coordination federal and state officials brought to the monumental task.

“For the most part, I felt like the (Army Corps of Engineers) did a great job,” Wolff said. “I was blown away by how well things came together and how much work was done in such a short period of time.”

Wolff said his company worked on the final lot to receive clearance, a site off Crown Hill Drive in the devastated Fountaingrove neighborhood that needed additional concrete removed, he said.

The Army Corps said it has “deactivated” its Rohnert Park office and would complete any additional work from Sacramento.

Plenty of work remains in the city and county, however, said Paul Lowenthal, Santa Rosa assistant fire marshal.

“Even though the Army Corps is stating that this part of the mission is complete, the city and county are still here, and we know there is still a long road to recovery,” Lowenthal said. “We’re not going anywhere.”

There are still two lots that need to be cleared in the city — a residential property and an apartment complex on Hopper Lane. Neither went through the government cleanup nor the private cleanup processes. Instead, the city’s legal department has been forced to initiate abatement proceedings against the two properties. It’s not clear how many such properties remain to the cleared in Sonoma County.

Some cleared properties still have issues, such as over-excavation, Lowenthal said.

An estimated 200 properties in Sonoma County may have been over-excavated by Army Corps contractors, and the state Office of Emergency Services is working with the county to identify them and return dirt to the site at no cost to property owners.

Of the 4,563 properties cleared, the vast majority, 3,674 or 81 percent, where in Sonoma County, where the Tubbs fire ravaged entire Santa Rosa neighborhoods. The Corps cleared 439 lots in Napa, 306 in Mendocino, and 144 in Lake County.

While the Corps has completed all debris removal on the 4,563 parcels, 22 sites still need to have additional work, such as soil testing and erosion control, before rebuilding can proceed, Lowenthal said.

Source: NorthBay Business Journal & Press Democrat

Story by Kevin McCallum, June 13, 2018

Why 2018 is the Year to Sell Your Home: An Economic Overview

Posted on June 12, 2018 by Admin

Considering selling your home or real estate investment? Projected economic and job growth coupled with an anticipated rise in interest rates (toward the end of this year and into the future) means that this spring and summer is the perfect time to sell your home. High demand and low housing inventory has made the first half of 2018 a seller’s market in the majority of the top housing markets in the United States.

This is a rare opportunity for sellers— you may get more than your asking price. Buyers are eager to close before the anticipated rise in mortgage payments; and the market is competitive, leading to bidding wars that are raising sales to well above listing prices, increasing your profits.

OUR ECONOMY: According to real estate economists, the economy will continue to grow over the course of the next 3 years, with 2.8% projected growth in 2018. Although the forecast is looking good for long-term growth, the anticipated surge may slow to 2% by 2020.

INVESTMENT ACTIVITY AND HOME PRICES: An economic rise featuring continuous job growth is expected to generate a boost in investment activity, making 2018 a perfect time to sell. “It appears that the forecast for strong economic growth may lead to higher levels of investment activity. According to urbanland.uli.org, survey respondents increased their expectations for transaction volumes for 2018 and 2019 (up $23 billion in 2018 and up $11 billion in 2019).” Alongside the increased investment activity, we will likely see a continuous rise in prices of homes over the course of 2018. Home prices will continue to surge until 2020, but at a decreased pace (5% in 2018 and 2.3% in 2020).

INFLATION AND INTEREST RATES: There is some anticipation that inflation rates will be on the rise until 2020 (resulting from the GDP growth rate). As inflation progresses, interest rates also increase leading to higher mortgage payments. We have already begun to witness the widespread anxiety that stemmed from an initial increase in interest rates— the stock market swing in early 2018.

So what does this mean if you are selling your home or property?  

Buyers will likely feel a growing sense of urgency to invest now, before rates surge even higher. Lingering fear from the housing collapse a decade ago may prevent potential buyers from investing as they see interest rates continue to climb. Although the fear is understandable, the average mortgage payment (adjusted for inflation) still falls approximately 36% below what we were paying back in 2006. Nonetheless, we may see some buyers leaving the market.

There is low housing inventory and buyers are ready to find their homes… But don’t wait too long, because your perfect buyers may decide to wait out this next cycle of economic uncertainty and the advantageous bidding wars that can escalate your returns $50k-300k will disappear with them.

Contact me at 707.322.2000 for information about selling your home in Northern California.

*Economic data taken from the most recent ULI Real Estate Economic Forecast