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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

December 18, 2020

 

 

Source citations:

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

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

News This Week: August Home Sales and Auction Success

Posted on September 28, 2018 by Admin

EACH WEEK WE COLLECT TOP LOCAL NEWS AND RECENT REAL ESTATE STORIES

August Market Report

Reports are showing that August sales are still increasing over previous months. And that’s not all—comparative sales and home prices are higher than last year. READ MORE

Kosta Browne Hosting New Dinner Series

Beginning in November, Kosta Browne Winery will host exclusive dinners with custom menus created by renowned chefs. READ MORE

Newest American Viticulture Area in California

Winemakers in the new Petaluma Gap AVA are getting notice for the distinctive wines that are being made in the region. According to the Press Democrat, the cool climate produces “elegant, crisp and focused wines.” READ MORE

Record Set at Sonoma County Wine Auction

The love in the air is thicker than the smoke. This year’s Sonoma County Wine Auction raised $5.7 million for charity. Enthusiasm was fueled by the focus on rebuilding efforts after last years devastating wildfires. READ MORE

 

 

 

Market Update for Sonoma County

Posted on August 06, 2018 by Admin

California home sales stumble in June as median price hits new high for second straight month

– Existing, single-family home sales totaled 410,800 in June on a seasonally adjusted annualized rate, up 0.4 percent from May and down 7.3 percent from June 2017.

– June’s statewide median home price was $602,760, up 0.3 percent from May and 8.5 percent from June 2017, hitting another peak.

– California condominiums/townhomes recorded a 7.0 percent price increase and a 7.1 percent sales decline from June 2017.

LOS ANGELES (July 23) – California’s median home price edged higher to another peak in June as year-over-year home sales lost steam for the second straight month.

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 410,800 units in June, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. The statewide annualized sales figure represents what would be the total number of homes sold during 2018 if sales maintained the June pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

June’s sales figure was up 0.4 percent from the revised 409,270 level in May and down 7.3 percent compared with home sales in June 2017 of 443,120. The year-over-year sales decline was the largest in nearly four years.

“California’s housing market underperformed again, despite an increase in active listings for the third straight month,” said C.A.R. President Steve White. “The lackluster spring homebuying season could be a sign of waning buyer interest as endlessly rising home prices and buyer fatigue adversely affected pent-up demand.”

For the second straight month, the statewide median home price hit another peak price at $602,760 in June. The June statewide median price was up 0.3 percent from $600,860 in May and up 8.5 percent from a revised $555,420 in June 2017. June marked the fifth consecutive month that prices increased by more than 8 percent annually, indicating that price appreciation remains robust and is not showing any signs of leveling off. The median price is now 1.4 percent higher than the pre-recession peak and has been growing on a year-over-year basis for more than six years.

“Although home prices increased year-over-year in virtually every region of the state in June, at the same time, nearly every county experienced a significant contraction in home sales from a year ago,” said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young. “With the year-to-date sales tally now in negative territory, the back-to-back sales declines could be an early sign that the market is transitioning, especially since further rate increases are expected to hamper homebuyers’ affordability and put a cap on how much they are willing to pay for their new home.”

Other key points from C.A.R.’s June 2018 resale housing report include:

  • On a regionwide, non-seasonally adjusted basis, all regions recorded year-over-year sales declines. Sales in the Bay Area dipped 0.8 percent monthly and fell 8.2 percent annually. Sales in the Inland Empire slipped 1.2 percent from May and was down 14.5 percent from a year ago. Sales in the Los Angeles metro region edged up 0.9 percent from May but was down 12.4 percent annually.
  • The Bay Area Region, which previously led the state in home sales, registered significant year-to-year sales decreases in seven of nine Bay Area counties. Only Alameda and San Francisco counties recorded annual sales gains, while Contra Costa, Marin, Napa, San Mateo, Santa Clara, Solano, and Sonoma counties experienced annual sales declines.
  • The Central Valley Region experienced the smallest sales contraction with sales falling 6 percent on an annual basis. Only Merced County posted a year-over-year sales increase, rising 15.2 percent from a year ago. Five counties – including Glenn, Kings, Madera, San Benito, and San Joaquin – posted double-digit annual declines, while Fresno, Kern, Placer, Sacramento, Stanislaus, and Tulare recorded single-digit annual decreases.
  • The Southern California Region suffered the largest home sales drop, falling 11.7 percent from May. Every county within the region posted declines with all but Orange and San Diego counties experiencing a year-over-year, double-digit pullback. Even the Inland Empire, which had been buoyed by San Bernardino County for the past several months, experienced significant declines.
  • By price segments, sales in every price category under $1 million contracted but lower-priced homes registered the largest sales decline as homes priced below $300,000 fell 23.8 percent from a year ago. At the other end of the spectrum, sales of homes priced $1 million and above increased 7.2 percent from June 2017. The very top end of the market, in particular, continues to post double-digits gains with homes priced over $2 million rising year-over-year by more than 13 percent in June.
  • The Bay Area continued to register the strongest home price gains with the region as a whole recording a 16.1 percent annual increase. While Contra Costa, Solano, and Napa counties experienced single-digit price advancements, the remaining regions experienced an uptick of more than 10 percent. Despite being two of the state’s least affordable markets outside of San Francisco, San Mateo and Santa Clara counties led the pack in price gains.
  • Home price growth in Southern California was more tepid by comparison, increasing by mid- to high-single-digits. Prices in San Bernardino – the most affordable county in the region – had the largest growth rate, and prices throughout the rest of the region grew at a more modest rate ranging between 5.1 percent and 6.9 percent.
  • Statewide active listings improved for the third consecutive month, increasing 8.1 percent from the previous year. The year-over-year increase was slightly below that of last month, which was the largest since January 2015, when active listings jumped 11.0 percent.
  • As sales declined from a year ago, the unsold inventory index, which is a ratio of inventory over sales, increased on a year-over-year basis as well. The statewide unsold inventory index edged up to 3.0 months in June from 2.7 months in June 2017. The index measures the number of months it would take to sell the supply of homes on the market at the current sales rate.
  • The median number of days it took to sell a California single-family home remained low at 15 days in June, unchanged from 15 days in June 2017.
  • A.R.’s statewide sales price-to-list price ratio* was 100 percent in June, unchanged from June 2017.
  • The average statewide price per square foot** for an existing, single-family home statewide was $290 in June, up from $270 in June 2017.
  • The 30-year, fixed-mortgage interest rates averaged 4.57 percent in June, down from 4.59 percent in May and up from 3.90 percent in June 2017, according to Freddie Mac. The five-year, adjustable mortgage interest rate, however, edged higher in June to an average of 3.82 percent from 3.79 percent in May and from 3.14 percent in June 2017.

Article courtesy of California Association of Realtors, July 23, 2018

News This Week: New Old Growth Redwood Park Larger Than Muir Woods and Weekly Real Estate News

Posted on June 29, 2018 by Admin

EACH WEEK WE COLLECT TOP LOCAL AND REAL ESTATE STORIES HOT OFF THE PRESS FOR YOUR WEEKEND CLICKING PLEASURE.

Oldest Redwood in Sonoma County
Save the Redwoods League has acquired 730 acres of northern Sonoma County coast. The land features incredible old growth redwood trees, including what may be the oldest tree in the County. Over the next few years, it will be turned into a public park larger than Muir Woods.  READ MORE

Free Flowing Wine
Free Flow Wines, a leading company in the fastest growing sector of the wine industry, is moving their operation from Napa to Sonoma. The move will increase the company’s capacity and provide additional bulk storage space for their premium wine-in-a-can service.  READ MORE

Home Sales Rising
The Commerce Department reported that new home sales increased by 6.7% in May. The trends looks like it will continue, with expectations that “improved economic growth, continued job creation and solid housing demand should spur additional single-family construction in the months ahead.” READ MORE

Surprising New Design Ideas
Designers are striving to make our homes healthier and more functional by integrating the microbiome into new and creative products — including wallpaper that filters the air and attractive flooring generated from “waste” materials. READ MORE

 

 

News This Week: Help for Homebuyers and California State Park Highlight

Posted on June 22, 2018 by Admin

EACH WEEK WE COLLECT TOP STORIES HOT OFF THE PRESS FOR YOUR WEEKEND CLICKING PLEASURE.

Annadel
This article takes a look at one of the incredible parks we have in Sonoma County ― Annadel State Park. “While the park today is primarily a recreation magnet, the landscape itself has stories to tell, and the natural history of Annadel is a fascinating tour through time and change.” READ MORE

On The Rise
A new report by the Union of Concerned Scientists describes the potential impacts of sea level rise in coastal California. Although global climate change may impact other states before California, tidal flooding is “inevitable.” READ MORE

Help for Homebuyers
Santa Clara County supervisors have approved a program that allocates $25 million in funding that will support first time home buyers with down payments. READ MORE

Sonoma Listed as One of Coolest Towns in America
Budget Travel just released its list of the “10 Coolest Small Towns in America.” No surprise to local residents, the town of Sonoma came in at the top of the list, taking the number two spot. READ MORE