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:
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.
“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.
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.
Mortgage rates are expected to stay at an all time low at around 3-3.5% well through 2021.
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.
Welcome to 7934 Juanita Court located within the city limits of Sebastopol with easy access to all Russian River recreation and wineries. The main house is a single story Rancher with two bedrooms and a half bath. The second dwelling is located at the back of the property and is a contemporary, spacious studio with a full bath and kitchen. This offering is a rare and fantastic home and rental opportunity within the city limits of Sebastopol.
Loads of charm potential and investment value in this 2 bedroom/1.5 Bathroom Rancher in the heart of Sebastopol,complete with a gorgeous detached Studio with a full bathroom and kitchen located at the back of the property. Tons of rental potential. Main house would be easy to transform into a charming, adorable home. Floor plan features two bedrooms on either end of the house for maximum occupant privacy. Features original hardwood floors, 2-car garage, large backyard with outdoor shower and mature trees. Within walking distance to parks, restaurants, art galleries, The Barlow, and more. A little TLC and a few finishing touches will make this home sparkle!
Healdsburg is a small, tourist community in Sonoma County in the heart of California’s beautiful Wine Country. Healdsburg truly takes the pleasures of life seriously with natural beauty, world-class wineries, farm-fresh food, and friendly residents. Considering moving to Healdsburg? Get ready to experience life in what is frequently ranked as one of the Coolest Small Towns in America and one of the Best Small Towns in the U.S.
The Sonoma region is best described as a haven for wine lovers and a grown-up’s theme park with restaurants that are less pretentious than in nearby Napa Valley yet just as chic and three of America’s top wineries all within reach.
The population of Healdsburg, CA is 11,721 and it’s one of 30 communities in Sonoma County, CA ranging from small coastal villages and quaint towns to major cities like Santa Rosa. The city has a median age of 44.6 years old, far above the national average 36.8 years, and this reflects the community’s high share of professionals, retirees, and highly educated residents. About 28% of people in the city have at least a bachelor’s degree compared with just 19% of the United States as a whole. Healdsburg is somewhat diverse with an ethnic composition of 62.6% white alone, 33.7% Hispanic of any race, 2.2% two or more races, and 1.1% Asian.
Looking for a safe place to live and raise a family? It’s hard to beat Healdsburg’s low crime rate. This safe city has far lower reported crime rates for theft, property crime, burglary, and violent crime than the California and national averages.
If you’re considering moving to Healdsburg, CA, you probably already know that life in central Sonoma Valley isn’t cheap. Healdsburg’s cost of living index is about 170 compared to the national average of 100 and the California average of 138. Much of this is attributed to high housing costs in Healdsburg, CA.
The average home price in Healdsburg is $647,600, nearly three times the national average, and the homeownership rate is slightly below average. Still, you can find homes that run the gamut with condos and townhomes priced below $250,000 to beautiful estates topping $3 million. You can start searching for Healdsburg, CA homes for sale to get an idea of what you can get with your budget.
So, how much does it cost to live in Healdsburg as a renter? Average rents in Healdsburg are around $1,466, according to RentCafe. That makes the city more affordable than nearby Santa Rosa where rent tops $2,200.
As a small city with just 4.5 square miles of area, Healdsburg doesn’t have many neighborhoods. That doesn’t mean you don’t have plenty of choice in where to live in Healdsburg, though. Every area of the city is highly rated for safety, great schools, and outdoor recreation.
One of the best places to live in Healdsburg if you like to be near the action and vineyards is the City Center. This is where most of Healdsburg’s businesses are located along with a handful of homes and apartment complexes. It’s here that you’ll have the best luck finding an apartment for rent in Healdsburg.
The Powell Ave/University St neighborhood is home to the Healdsburg Golf Club at Tayman Park and many residential developments with single-family homes. There are plenty of parks to explore in the neighborhood and one of the city’s famous vineyards.
The Lytton/Simi area is the largest area of Healdsburg and it’s home to the most open space, beautiful views, and spacious homes. If you want room to explore and more privacy from your neighbors, you’ll probably want to be in this area farther from the city center.
They’re the classic drivers of any market: supply and demand. Experts say that unfavorable conditions in both have presented the region’s wine industry with a grape glut — a challenge in the form of oversupply.
It’s not that this year’s harvest was particularly large, according to Jon Ruel, CEO for Trefethen Family Vineyards, but rather that last year’s harvest is on the mind — and in the tanks — of many wineries.
“When we talk oversupply, it’s the hangover from 2018,” Ruel said, noting that 2018 gave way to a harvest of historic proportion. “For wineries, it’s not hard to remember just how big 2018 was, because a lot of (the wine) is still in the pipeline.”
On the demand side, according to Glenn Proctor, partner of the wine brokerage firm Ciatti Company, the market for wine experienced a “pullback” beginning in 2017. The majority of 2018’s harvest was contracted — meaning grapes were spoken for — but the size of the crop itself, the largest picked to date in California, “exacerbated” the glut situation the industry finds itself in today, Proctor said.
In 2018, wineries crushed a staggering 612,833 tons of grapes, up more than 20% from 2017. Harvest was especially flush in Napa and Sonoma counties; growers harvested a crop that was about a third larger than usual, according to Proctor. He said spot market prices for uncontracted fruit this year hit a steep decline, with Cabernet Sauvignon grapes—a relative market strength—selling for less than half of what it sold for in 2018.
“2019 has been a year where it’s tough to sell grapes and bulk wine, because most of the buyers — wineries — already had sizable inventories because of 2018,” he added.
John Hughes, owner of H&H Wine Brokerage in Napa, said he’d seen notable price deflation in the market this year. Earlier this season, he brokered a deal that saw Napa Valley Cabernet go for $12 a gallon — about a third of its regular price. Even starker, he said, was the price at which some Napa Valley grapes were selling: his firm saw “quite a bit of movement” at $1,500 per ton. That’s just a fourth of what grapes — at around $6,000 or more per ton — normally sell for.
“The market just won’t sustain that anymore,” Hughes added. “(Distributors) aren’t picking up wine at previous prices, so we’re marketing to a different group of folks.”
Those ‘folks’ are largely the millennial crowd — a group with a taste for “a different bottle of wine” than has been traditionally marketed by Napa, Hughes said, and a weak point for the wine industry. Proctor also cited competition from beer, spirits and new additions to the alcoholic beverage market, like increasingly popular spiked seltzers and even hard kombucha.
“It may not be focused at (all) age groups, but it is really interesting,” Proctor said, of the drinks. “We’ll see how the consumer chooses, which is good: the wine industry has to remain competitive and produce a high quality product.”
Ruel believes that won’t be difficult: though 2018 was notable for the quantity of the crop it produced, he says the quality of the fruit was notable, too.
“Napa’s wineries are in a position of having more wine than they need, so they’ll get to be especially choosy (with their fruit),” Ruel added. “That makes this a great time to be a consumer.”
There are a variety of ways with the oversupply, Ruel added. He’s spoken to vineyard owners strategically replanting some acreage this year, delaying future fruit production to correspond with market rebound. Wineries, on the other hand, could be purposeful with moving inventory, creating tank space for grapes.
That’s been the tactic at hand for Cliff Lede Winery, according to COO Remi Cohen. Lede Family Wines grows all of its own grapes and saw a large 2018 harvest, in line with industry trends, Cohen said. It helps, she added, that the harvest in 2017 was under average — globally, it was the lowest level of production in 16 years.
Cliff Lede Winery has a tank for each of its vineyard blocks, Cohen added, meaning it isn’t strapped for space. Still, though, the winery plans to push the release and thus the sale of its 2017 vintage up earlier than originally planned.
“Then we’ll be able to release 2018 early, and have more time to sell that — that’s our main strategy,” Cohen said, of moving inventory, adding that the excess is “a good problem” to have.
“We could have had two other problems: not enough fruit, or too much mediocre fruit. This is an opportunity,” Cohen said.
Proctor noted that in speaking with clients, he’s observed “adjusting on the supply side.”
“No one was making a whole bunch of wine, hoping there would be a buyer. People were cautious,” he said.
Hughes said much would depend on the size of the harvest in 2020. A smaller harvest could correct the oversupply — though Ruel noted that growers, as farmers, “never hope” for a small growing year. And Proctor pointed to the ever-cyclical nature of agriculture, which has long been at the mercy of supply and demand.
“Growers aren’t overjoyed, but they see a path forward,” Proctor said. “They’ve been through this before.”
Note: At the end of January, Mark Stevens participated in the annual Unified Wine and Grape Symposium in Sacramento. The article below was written by one of the attendees of the Symposium, Dr. Liz Thach. Dr. Thach is a Distinguished Professor of Wine and a Professor of Management at Sonoma State University in Rohnert Park, California. Below is the article she wrote for 2019’s wine industry “summary”, reposted here with her permisssion:
The US Wine Industry in 2019 – Slowing but Steady, and Craving Innovation
After 24 years of continuous growth in wine consumption the US market slowed to only 1.2% in volume in 2018 (bw166). Despite this flattening of volume growth, dollar value still grew at a 3.7% suggesting that, though Americans may be drinking less, they desire higher quality wine and are spending more per bottle. This indicates that wine still maintains it place as an important American beverage, but wine marketers need to get more creative in order to bring new consumers into the category. The total dollar value of the US wine market in 2018 was $70.5 billion, with $23.3 billion (33%) derived from imported wine (Wines & Vines Analytics, 2019).
Why the Decrease in Volume Growth?
Experts suggest a series of reasons for the decrease in volume growth: 1) the aging Boomer generation who are drinking less wine due to health reasons; 2) Millennials not adopting wine as much as had been predicted; 3) the growth of new substitute products, such as cider, cannabis, and creative entrants from craft beer and spirits (see Hot Trends below); and 4) a growing focus on healthy food and less alcohol (McMillan, 2019).
US Still Largest Wine Consuming Nation and a Target for Exporters
Despite these challenges, the US remains the largest wine consuming country in the world, and therefore is a target for many foreign wine producers. Indeed, 26% of the wine volume sold in the US last year was imported, with Italy in the lead for overall sales, followed by Australia, New Zealand, France, and Argentina (Swindell, 2019). The following paragraphs provide a high-level overview of the current state of the wine industry in the US, including “hot categories” desired by American consumers.
Wine Case Volume by Channel
Total volume of wine sold in the US in 2018 was 408 million 9 liter cases (bw166, 2019), up 1.2% from 2017.
Off Premise – wine sales via grocery stores, wine shops, and other off premise establishments remain the largest channel in terms of both sales and volume in the US market. Volume was 331 million, according to Wine & Vines Analytics, but this figure included the 6 million sold DTC, so this was updated to 325 million. There are an estimated 194,000 off-premise establishments that sell wine (Brager, 2019).
On-Premise – wine sales at restaurants, bars, and other on-premise establishments is the second largest channel at around 77 million cases, according to Wines & Vines Analytics. There are around 373,000 on-premise establishments that sell wine (Brager, 2019).
DTC (Direct to Consumer) – selling wine directly to consumers via winery tasting rooms, events, ecommerce, and other direct methods continues to be a fast growing channel in the US market, but still at a very small percentage of overall volume. According to Sovos, volume increased by 9% to 6 million cases shipped, and value increased by 12% to achieve $3 billion in sales. The price of the average bottle sold DTC was $39.70, and Sonoma, Oregon, and Washington wineries showed the most volume growth in this channel in 2018. There are currently 9997 US wineries (Wines & Vines Analytics, 2019b).
Top 5 Most Popular Wine Varietals in the USA
The most popular wine varietals/styles in the US market based on volume continue to be: 1) Chardonnay, 2) Cabernet Sauvignon, 3) Red Blends, 4) Pinot Grigio, and 5) Pinot Noir (Nielsen, 2019b). It should be noted that this year cabernet sauvignon ($2.595 billion) has just inched past chardonnay ($2.549 billion) in dollar value. It is expected that cabernet sauvignon will be the number one varietal in volume as well in the next year or so.
Number of Wineries and Wine Consumer Demographics
US Wineries = 9997 as of January 2019, up from 9645 year to date (Wines & Vines Analytics, 2019b). California largest at 4,425 wineries, producing 85% of wine, followed by Washington (776), Oregon (773), New York (396), Texas (323) and Virginia (280).
Percentage of Adult Americans who drink wine = 40% of legal drinking population (240 million) (WMC and bm166)
Wine Consumption Frequency: (WMC- 2018)
High Frequency Wine Drinkers = 33% drink wine more than once a week
Occasional Wine Drinkers = 67% drink wine once a week or less
Gender of Wine Drinkers = 56% female and 44% male (WMC, 2018)
Per Capita Wine Consumption = 11 liters per person (2.94 gallons). Even though US is largest wine consuming nation by volume, per capita rates are less than many other countries (Wine Institute, 2016)
Hot Trends & Opportunities in the US Wine Market
A major benefit of attending the Unified Wine Symposium (largest wine conference in America) each year is the keynote speech delivered by Danny Brager with Nielsen. He analyzes top wine sales trends in the industry and shares the results. Here are some of the highlights (Brager, 2019):
Pink Wine – rosé wine continues to be extremely popular, with double digit growth across all price points.
Bubbles & Freshness – Sparkling wines and zippy sauvignon blanc wine continue to show growth, especially in dollar value.
Big Reds – Cabernet Sauvignon and red blends continue to be very popular, with cab starting to inch out chardonnay as the favorite US varietal
Cider, Sangria & Wine Cocktails – are gaining ground as variety-seeking Millennials explore new beverage options
Healthy Wines – though it is not legal to advertise health benefits of wine in the US, consumers are becoming more attracted to wines that use these types of descriptors: “no taste additives, gluten free, low carb, vegan friendly, sulfite free, low calorie, low alcohol, light, lighter, organic, paleo friendly, etc.” This is because of the new focus on healthy food and beverages that is sweeping the nation.
Hot Trends: Rosé, Sparkling & Wine Cocktails. Photo Credit: Pexel
Cans & Creative Packaging – wine in cans is no longer a fad. It is here to stay and growing at double digits, achieving $70 million in sales by the end of 2018. Other alternative containers (tetra, box, and mini-bottles), as well as clever packaging, such as augmented reality labels (see 19 Crimes and Bogle Phantom), are capturing the attention of younger wine consumers. I-Generation is especially fascinated by the AI labels.
$11.99 – $19.99 Sweet Spot – the sweet spot for off-premise sales continues to be $11.99 – $14.99 with 8% volume growth and $15 – $19.99 at 10% volume and value growth. Wine priced at less than $10 showed no volume growth, indicating that premiumization continued to thrive during 2018.
Oregon, NZ & France –continue to show most volume and value growth, maintaining their popularity with US consumers during 2018. Oregon led with pinot noir, NZ with sauvignon blanc, and France with rose and sparkling wines.
Cross-Overs & Cannabis – when the car industry introduced “cross-over vehicles” several years ago (SUV/car hybrid), they started a trend that has crossed over into food and beverage. Thus the US market has seen hundreds of new beer, spirit, juice, and now even cannabis beverages in which wine is a featured ingredient. Consider Oenobier beer aged on muscat wine and Rebel Coast Cannabis infused sauvignon blanc. This type of creativity is very attractive to many buyers who enjoy experimenting with new products.
We are thrilled to represent the buyers of this stunning property in Healdsburg, CA!
It was such a treat to work with Jack and Bee (and their adorable Beagle, Ping). This family is from San Mateo and heavily invested in the tech savvy atmosphere that dominates there. They frequently escaped to Healdsburg for much needed fun and relaxation and decided that they were visiting Healdsburg so much, why not buy something and have a great investment, too? We were able to negotiate a great deal on behalf of Jack and Bee and it perfectly fit their goal of having a great escape and a place for all their numerous friends to stay. To be sure, Jack and Bee were dream buyers, and working with them was truly a pleasure.