Real Estate News and Analysis

Sonoma County Market Snapshot for January 2021

Posted on January 21, 2021 by Admin

  • Sonoma County consists of 44 cities. There are approximately 1,521 homes for sale, ranging from $23K to $28.9M.
  • In December 2020, the median list price of homes in Sonoma County, CA was $699K, trending up 8.2% year-over-year. The median listing price per square foot was $426. The median sale price was $665K.

Sale-to-List Price Ratio: 100%

  • Homes in Sonoma County, CA sold for approximately the asking price on average in December 2020.
  • Sonoma County, CA is a seller’s market in December 2020, which means that there are more people looking to buy than there are homes available.
  • On average, homes in Sonoma County, CA sell after 51 days on the market. The trend for median days on market in Sonoma County, CA has gone up since last month, and slightly down since last year.

Other Economic Factors for Sonoma County

  • Sonoma County, CA Unemployment Rate is at 5.50%, compared to 6.00% last month and 2.40% last year. This is higher than the long term average of 5.37%.
  • For today, Thursday, January 21, 2021, the benchmark 30-year fixed mortgage rate is 2.880% with an APR of 3.180%. The average 15-year fixed mortgage rate is 2.360% with an APR of 2.700%. The 5/1 adjustable-rate mortgage (ARM) rate is 2.980% with an APR of 3.990%.

Prop 19 and What it Means for You

Posted on December 18, 2020 by Admin

Information posted from C.A.R on November 23, 2020:

Proposition 19: Property Tax Increase Limits on Primary Residences
How does Proposition 19 change the rules on tax basis portability?
Prop 19 allows a homeowner who is 55 years of age or older, severely disabled or whose home has been substantially damaged by wildfire or natural disaster to transfer the taxable value of their primary residence
to: a) a replacement primary residence anywhere in the state, b) regardless of the value of the replacement primary residence (but with adjustments if replacement has a greater value), c) within two years of the sale and d) up to three times (or as often as needed for those whose houses were destroyed by fire).

The prior rule limited this exemption to a one-time transfer within the same county (Prop 60) or between certain counties (Prop 90) and only if the replacement property was of “equal or lesser value.”

When does the tax basis portability portion of Prop 19 take effect?

April 1, 2021

Can my client buy/sell now and take advantage of the tax portability benefits before April 1, 2021?

There is no definitive answer in the law. Although, we believe that the tax benefits under Prop 19 will apply to transactions where either the sale or purchase of a primary residence takes place before April 1, 2021, as long as the subsequent sale or purchase takes place within two years and occurs on or after April 1. If you have a client who wishes to obtain the tax benefits of Prop 19 for a transaction that closes prior to April 1, 2021, whether it is buying or selling a property, the client should be encouraged to seek the advice of a qualified California real estate attorney or tax advisor.

If the replacement property is of equal or lesser value, does the tax basis of the replacement property change?

No. The taxable value of the original property may be transferred and become the taxable value of the new one. If the replacement property is of greater value, how is the new taxable value calculated? The new taxable value is calculated by adding the difference between the full cash value of the replacement property and the original property to the original taxable value. For example, if a seller of an original property has a $300,000 taxable value and a full cash value of $1M and then buys a replacement property for $1.5M, the taxable value of the replacement property would be $800,000.

Can a replacement property be purchased prior to the original primary residence being sold? Yes. This is how the current rule under Prop 60 works, and Prop19 uses nearly identical language.

How does Prop 19 affect the rules on intergenerational transfers to children or grandchildren?

It limits the exemption to those properties where the primary residence continues to be used as a family home by the child or grandchild transferee. If so, the taxable value will remain the same, subject to some upward adjustments if the property value, at the time of transfer, is more than $1M over the original tax basis.

If the property is more than $1M over the original tax basis, what is the new taxable basis?

The new taxable basis will be the assessed value of the property at time of transfer minus $1M.

When do these new rules on intergenerational transfers apply?

February 16, 2021.

Where may a claim to transfer a tax basis be made?

Claims may be made with forms provided by the local county assessor’s office.

 

Quick Guide

Proposition 19 from the Secretary of State

Real Estate: The “Bright Spot” in California’s Economy

Posted on December 17, 2020 by Admin

The beginning of 2020 saw the California real estate market humming along at a good clip. Then came March and the COVID-19 lock-down and everything came to a screeching halt. Sellers pulled homes off the market, afraid of contagion, and buyers stopped looking, mostly for the same reason, as the entire US economy literally shut down for about the next three and a half months.

But in June of 2020 things began to change. Real estate was designated “essential” and Home buyers, driven by a refocused need of home as a refuge, began to come out again. This resurgence was in part fueled by a large segment of workers in our economy who needed to work remotely from home, many with children who were also schooling remotely from home. Home has always been held in high esteem, but the pandemic raised the idea of Home as a Refuge to new levels of demand not seen before.

In July, the California Association of Realtors (C.A.R.) reported that home sales across the state rose by a whopping 42% from May to June 2020. That’s partly due to the state’s gradual reopening which happened at that time as well as from pent up buyer demand.

What was a surprise and has since become a trend is the exodus of buyers leaving high priced, high-density urban areas, like San Francisco, for suburban areas that offered more space, privacy, and affordability. In fact, as we speak, San Francisco continues to experience a softening of prices in its housing market. And local news channels report that a significant number of San Francisco rentals are sitting vacant.

As an example, this trend was readily seen last summer in areas like the Russian River of the North Bay. Out of the way comparatively “cheap” river shacks along Rio Nido, Guerneville, Monte Rio and Cazadero were gobbled up like so many potato chips left unattended at a picnic with all-cash offers and little to no contingencies. Other rural to suburban areas, like Murphys, is experiencing similar value shifts in its housing market. With many now having the ability to work remotely, areas once inaccessible as a primary residence are now doable.

Home Buying Institute (HBI) predicts the following for the California real estate market in 2021:

  1. Home price appreciation will tick upwards as buyers and sellers realize that real estate deals can still be conducted despite the pandemic and because of upcoming vaccinations which will help to create confidence and normalize life.
  2. “Urban Flight” will continue to be a thing, with the desire for space and privacy at an all time premium which will continue to drive up prices in small towns, suburbs and more rural areas.
  3. Home inventory is expected to grow as more sellers get comfortable with putting their home on the market again and as we see more foreclosures come to market.
  4. Mortgage rates are expected to stay at an all time low at around 3-3.5% well through 2021.
  5. An increase in home sales is expected as the urban to suburban migration continues, which should keep California’s real estate market very active all through 2021.

In conclusion, the housing market continues to surprise economists and analysts. During this unprecedented pandemic it has been referred to, repeatedly, as the one “bright spot” in the nation’s economy. This surprisingly strong performance is expected to continue through the end of 2020 and well into 2021. And as we collectively face the challenges ahead, including what is now commonly termed a “dark winter” it’s nice to have a bright spot on the horizon. Finally, it’s worth remembering that the shortest, darkest day of the year is December 21st, but after that, days will get longer and brighter. Think of the pandemic as the shortest, darkest day of the year and look forward to things getting better and brighter.

Wishing you and your loved ones hope and brightness in the days to come. May 2021 be the year more of our hopes and dreams come true.

—Mark Stevens and Associates at The Agency, Healdsburg

December 18, 2020

 

 

Source citations:

Norada, https://www.noradarealestate.com/

HBI (Home Buying Institute), http://www.homebuyinginstitute.com/news/california-housing-predictions-for-2021/

No, the Kincade Fire Didn’t Level Sonoma County. So Go Visit.

Posted on November 13, 2019 by Admin

Photo Courtesy of A. Rafanelli Winery

A. Rafanelli Winery in Dry Creek Valley is among Sonoma’s many wineries hoping to welcome travelers after the Kincade Fire. “We’re here. We’re ready. We’re waiting,” says winemaker Shelley Rafanelli.

Article courtesy of AFAR.com by Matt Villano


No, the Kincade Fire Didn’t Level Sonoma County. So Go Visit.

This past Monday was a glorious afternoon on the plaza in downtown Healdsburg. Not a cloud in the sky. Brisk, fresh air to inhale. Over by the fountain, a toddler busily placed leaf after leaf on the surface of the water and watched his “boats” float away. Under the gazebo, a gaggle of teenagers strummed guitars. Across Healdsburg Avenue, inside Charlie Palmer’s Dry Creek Kitchen, servers were buzzing around the dining room preparing for the dinner crowd. Through the windows at nearby stores, you could see shoppers buying shoes, clothes, and locally made art and knickknacks as souvenirs to bring back home.

Yes, this is the same Healdsburg that was threatened by the raging Kincade Fire last month. And, yes, that same fire destroyed more than 140 homes and most of a historic winery as it churned through nearly 78,000 acres of a largely unpopulated area in the northeast corner of the county. There’s no question that the fire harmed Sonoma County; days of forced power and gas shutdowns from the regional utility affected the entire San Francisco Bay Area.

Cal Fire declared the Kincade Fire 100 percent contained on November 6. A few days before that, this part of wine country was back to being as beautiful and vibrant as ever.

In Geyserville, Healdsburg, and Windsor, the three communities closest to the fire, small businesses run by local artisans are open for business. Restaurants, from hole-in-the-wall taco stands to the Michelin-starred Single Thread, are cranking out delicious meals. Heck, even Soda Rock Winery, which lost nearly all its modern production and visitor-oriented facilities in the blaze, is back to hosting weekend tastings in a 100-year-old barn that survived.

“People have a tendency to see images of burning houses or hear, ‘Natural disaster!’ and think the worst,” says Dave Hagele, Healdsburg’s mayor and a long-time resident. “The truth is that while this fire did a number on a whole bunch of wild land to the north and east, the part of wine country that people know and love is carrying on with business as usual.”

Understanding “the burn zone”

Perhaps the best way to explain the situation in Sonoma County is with simple math. There are 1,131,520 acres of land in Sonoma County, and about 78,000 of those were burned. That means less than 7 percent of the land in Sonoma County was affected by the Kincade Fire. Which means that more than 93 percent of the county was unharmed and today looks exactly as it did on October 22, the day before the fire started.

Sam Bilbro, owner and winemaker at Idlewild Wines, was frustrated with some of the negative press the region was getting after the fire, so he created an Instagram post that tells this story with a picture. The image depicts a map of the county with the burn zone delineated in red. Compared to the rest of the map, the red part is minuscule.

“You look at this map and you realize the fire was a really small part of Sonoma County,” he says. “Our cities, our forests in West County, our coastline, and the Sonoma Valley are as they’ve always been.”

The Significance of Rental Price Increases for Real Estate

Posted on July 23, 2019 by Admin

According to Inman, “Rents in the US just keep going up and up…..The average rent was up 3.2% year-over-year in June. Last month also saw the biggest average rent increase in more than a year….”

In a nutshell, it’s a perfect time to buy rather than rent. Reasons why include:

  • Very low interest rates
  • A real estate market that has “softened” over the last year more in the direction of buyers
  • Tax breaks that come with buying and owning
  • Control over the place you call home
  • Realizing the “American Dream”
  • Building equity/apprecation over time (a house can be like a big piggy bank)
Zeroing in on Sonoma County, here’s what we have:
And take note: the “doldrums” of summer is the perfect time to visit open houses, get pre-approved for a loan, and make an offer. The market is typically “slow” this time of year, with more inventory and less bidding, so you are more likely to get something you want at a price that works.
Need help finding the right place? Give us a call. We are here to help you find your dream home!
Mark Stevens & Associates, 707 322 2000
Graphs courtesy of RentCafe

What’s So Special About Anderson Valley?

Posted on June 11, 2019 by Mark Stevens

See our latest Anderson Valley vineyard listing…..

Still somewhat of a secret in the viticulture world, Anderson Valley is to Pinot Noir what Hog Island is to Sweetwater oysters. Meaning, its “terroir” is perfect for two continually trending grape varietals, namely Pinot Noir and Chardonnay. Our newest offering for a 15+acre vineyard planted exclusively to Pinot Noir in the Anderson Valley AVA brings this popular varietal into sharp focus.

Like the Sweetwater oysters of Hog Island, not a lot of places can create a decent Pinot Noir, much less a great one. Because of its unique valley formation stretching from the inland 101 corridor to the Pacific coast and flanked on either side by mountains surrounding rolling to nearly level alluvial terraces, Anderson Valley is the perfect configuration for Pinot Noir vineyards. Elevations range from sea level to 2500 feet and annual precipitation ranges from 35-80 inches. The valley delivers the critical one-two punch of cool, ocean-tempered nights with heat-laden, sugar-forming days for fruit that is described as “elegant yet powerful.” As they say, Cabernet is the king of wines (nod to Napa) but Pinot makes kings. Most would agree that a great Pinot Noir can be confused for a nuanced Cabernet, and this is the type of fruit we are talking about here.

The Anderson Valley is 2,500 acres and home to approximately 88 individual vineyard plots and 49 winemaking operations. The valley runs along more of an east-west axis than the more typical north-south alignment. This orientation permits Pacific fog and breezes to penetrate further inland, making for an overall cooler microclimate. Grapes in Anderson Valley are on average three weeks behind grapes from most other California winemaking districts due to its proximity to the Pacific ocean. The Navarro River runs along the lower length of the valley, acting as a cooling influence for the hills on either side. Vineyards are seen at elevations approaching 2,500 feet, but most vines are planted in the low-lying foothills. It is not uncommon, especially in the more southerly half of the valley, to see vines planted right up to the edges of redwood groves. Because Redwood trees like to grow in cold soil it is thought to indicate soils that will grow premium Pinot Noir. Unlike Sonoma and Napa counties, if there is a heat event in the area the vines can easily and quickly recuperate, and the grapes will continue ripening steadily. This makes for a rare combination which produces Pinot Noir fruit that is unique. Hot days combined with a 40- to 50-degree drop in temperature at night results in concentrated fruit on top of elegant tannin structure that has both power and elegance.

Anderson Valley is roughly 16 miles long and for every mile from Boonville to Navarro an average of 1 degree in temperature is lost. As such, when it’s 85 in Boonville, it’s 70 in Navarro. Boonville makes for sassy, fruit-forward pinot. Five miles down the road in Philo the pinot is more piquant with darker fruit. At the end of the Valley–known as the “deep end” and closest to the Pacific–the fruit is herbaceous and spicy.

Anderson Valley’s soils vary but tend to be rich in loam, with differing amounts of rock and
gravel. A recent survey showed that of Anderson’s 2,500 acres, nearly 70% (1,700) were Pinot
Noir, with Chardonnay (559) second, followed by Gewürztraminer (103), Merlot (73), Pinot Gris
(41), and Riesling (22). The aromatic whites, especially those of Navarro, Handley, and Husch,
are often the best in the state. Though produced across a spectrum of sweetness, the most
successful are bone dry in style. Pinot Noir has long been the regional star and tends to land
somewhere between the more citric, high acid style that typifies the Sonoma Coast and the
soft, generous style associated with Carneros. Historically, Chardonnay has taken a backseat in
Anderson Valley but has recently been enjoying a sudden surge in quality.

Being somewhat new to Sonoma County by way of Colorado, I was exposed to this hidden gem of a place–Anderson Valley–through my work as a license real estate assistant for Mark Stevens, a realtor of 30-years who specializes in country estates, wineries and vineyards. It still surprises me how many Sonoma County residents know so little of Anderson Valley, and have actually not been to the valley. Some of the things I love about Anderson Valley is just how plain gorgeous it is, with grassy oak-dappled hills flanked by redwood forested mountains. The feeling is definitely country, with a good dose of farm-to-table gourmet offerings, and of course, amazing wineries and tasting rooms. There is good hiking and camping at Hendy Woods State Park, recreating on the Navarro river, and the promise of the ocean down the way.  Anderson Valley is a great secret worth discovering.

Check out our new listing, Philo Hillside Vineyard

Cheers, Michelle Magnus

June 2019

Michelle Magnus at Hendy Woods State Park in Philo, CA