Wine Country Real Estate Trends in September 2018

Wine Country Real Estate Trends in September 2018

One Year Anniversary of the Wine Country Fires

It is the one-year anniversary of the 2017 wildfires that devastated our area killing 44 people and destroying over 5,300 homes. A year ago I wrote in this blog about the impacts that we could foresee at that time in the real estate business. My notes included the following:

The market activity will pause to absorb the shock of what has happened.
Some escrows and listings will cancel – just taken off the market. Property insurers, title insurers and lenders will all want to take a careful look at the properties underlying their commitments – so things will slow down for a bit.
Inventory might shift. Perhaps some inventory that has been on the market for some time will become rental stock for those needing to rebuild. Vacation rentals may become long-term rentals as fewer folks will come up for vacations here.
It will take a couple of “seasons” for the physical scars of the fires to heal and it may take that long, or longer, for the mental scars to heal.
Events like these often foster new and better building codes and disaster preparation practices. Hopefully the building departments in the affected areas will create stream-lined processing for permits to rebuild.

All of these things seem to have come to fruition. Some folks are rebuilding and are under construction; some are rebuilding and going through “the process”; some have bought replacement homes and are selling their lots; some are renting and selling their lots; some are moving on to other places. It’s still too early to see where the “percentages” of these various options will shake out. I have further observations on the sale of fire-burned lots below.

Better Homes and Gardens Real Estate|Wine Country Group Results for September 2018

Santa Rosa Office: Mari Giblin – Units Sold and Listings Sophie Phelps – Dollar Volume

Sebastopol Office: Liz Uribe – Units Sold, Dollar Volume and Listings

Sonoma Office: Sheila Deignan – Units Sold, Dollar Volume and Listings

St. Helena Office: Linda Alioto – Units Sold (tie) and Dollar Volume Rianne Pasquariello – Units Sold (tie) and Listings

Better Homes and Gardens Real Estate|Wine Country Group enjoyed 33 closings in September 2018 compared to 54 last month and 42 last September. On a year to date basis, we are slightly behind in units closed comparing 2018 to 2017. In September, we closed homes with a total value of $19 million compared to $34 million last month. The average selling price of the properties sold by the Wine Country Group in September was $566,061.

BHGRE|WCG currently has 39 pending sales with a value of $26 million dollars. We have 61 active listings with a value of $58 million dollars. Our average listing price is $951,000.

We are pleased to announce the opening of a new BHGRE|WCG office in Petaluma. The address is 421 Petaluma Blvd. N. at the corner of Lakeville Hwy. Our Petaluma phone number is 707-794-6455. Please stop by if you are in the area!

Wine Country Real Estate Trends for September 2018:

Lot Listings After the Fires: Over 5,300 homes burned in Sonoma and Napa Counties in the October 2017 fires. We continue to see lots coming on the market, but the pace has slowed and perhaps leveled off. We may have reached the point where most of the lots to be resold are, or have been, on the market. At the end of September, there were 519 vacant lots on the market – the vast majority being from the fires. This is an increase of 65% from the inventory in September 2017 (314) but only slightly above the inventory last month (513). There were 50 new sales in September 2018. This is a 178% increase over the 18 new sales in September 2017 and a reduction of nine sales from last month (59). There is a 10 months supply of inventory based on this sales pace. 23 lots closed in September with a median sales price of $295,000. This compares to $260,000 last month and $250,000 last year.

We continue to estimate that the “fire” lots are being offered at approximately 60% of what might have been their value before the fires. The complications of clearing, permitting and building on these sites remain high.

Sonoma County: The inventory of homes and condominiums available in Sonoma County at the end of September stands at 1,198. This is 33% ahead of the inventory in September 2017 (899) and it is down slightly from the inventory last month (1,216). This remains a relatively high inventory. Inventory jumped 38% in Marin County last month (534) and has been essentially flat in Napa County for the past four months (412). So, Sonoma County has more inventory than both of our neighboring North Bay counties combined. New sales (472) in Sonoma County in September were 10% ahead of the pace of September 2017 (429) and they were 6% ahead of the pace last month (445). There is a 2.5 months supply of inventory in Sonoma County based on the existing sales pace. The time it takes to sell a home in the various areas of Sonoma County (Days on Market) varies from 41 (Rohnert Park) to 98 (Healdsburg) days. For the purpose of our MLS (BAREIS) “Days on Market” represents the time from when the property is first listed in the MLS to the date the property goes into “pending” (all conditions removed) status. On average, it can take anywhere from 0 to 30 additional days for properties to close after going pending. The average Days on Market for the County as a whole is 59 days (the highest since January of this year). The median price of homes closed in September in Sonoma County was $635,000. This is an 8.5% increase over the median price in September 2017 ($585,000). As we expected, the appreciation rate has settled down from the 12% year over year increase in the first part of the year. We’ll wait to see if the rate of appreciation continues to decline.

Sonoma County Luxury Homes: About one quarter of the inventory in Sonoma County can be characterized as Luxury Homes (listing price in excess of $1,200,000). There has been a 30% increase in the number of Luxury Homes closed (598) from 10/1/17 to 9/30/18 compared to 404 closings in the period 10/1/16 to 9/30/17. The inventory of luxury homes (287) is 4% below the inventory in September 2017 (299 homes). The pace of new sales (49) in September this year is 40% ahead of the pace of a year ago (35) and it is 11% below the pace last month (55). The Days on Market for Luxury Home closings was 78 days this September compared to 104 days a year ago. This compares to 59 Days on Market for all closed properties in the County in September. There is a 5.9 months supply of inventory of luxury properties based upon the current sales pace compared to a 2.5 months supply in the overall Sonoma County market.

There has been a large stock market sell-off in the past week. In response to a question about it’s affect on real estate, a Chief Economist for a large San Francisco based brokerage responded: “We’ve seen a notable drop in sales in September particularly in the luxury market where a lot of our buyers are tech and/or finance executives. I think recent rhetoric on trade and problems tech companies have been facing (Google, for example) is not boding well for consumer confidence.” That being said, luxury home sales were ahead on a year over year basis in Wine Country last month. Our experience is that trends in the San Francisco peninsula, San Francisco and Marin usually make there way to Wine Country in short order.

Cloverdale: The inventory of homes and condominiums for sale (50) in Cloverdale at the end of September is 47% ahead of the inventory in September of 2017 (34). It is equal to the inventory last month (50). There were 11 new sales in Cloverdale in September. This compares to 9 sales in September 2017 and 9 new sales last month. There is a 4.5 months supply of inventory based on the current sales pace. The Days on Market for the 10 homes that closed in September was 45 days.

Coastal Sonoma: There were 27 homes and condominiums available in Coastal Sonoma (Bodega Bay, Jenner and Stewart’s Point). This is 10% below the inventory (30) a year ago and it is about equal to the inventory last month (26). There were 6 new sales in September compared to 10 a year ago and 8 last month. There is now a 4.5 months supply of inventory in Coastal Sonoma based on the current sales pace. There were 6 closings in the month, the same as a month ago. The Days on Market for the homes that closed in September was 51 days.

Healdsburg Trends: Inventory in Healdsburg has been rising steadily since the beginning of this year. There were 100 homes and condominiums available for sale in Healdsburg at the end of the month. This is 5% above the inventory in September 2017 (95) and it is 9% ahead of the inventory last month (92). There were 22 new sales compared to 19 in August. Sales were 12% below the pace of sales in September 2017 (25). The months of available inventory is now 4.5 months based on the current sales pace. The Days on Market for the 16 homes that closed in September was 98 days.

Oakmont: Inventory remained high in Oakmont at the end of September. There were 49 homes available. This is 308% ahead of the inventory in September 2017 (12) and it is slightly below the inventory last month (50). New sales (23) jumped up and are 64% ahead of the sales pace of a year ago (14) and are 28% ahead of the pace of last month (18). There is a 2.1 months supply of inventory based on the current sales pace. The median price of the homes sold in Oakmont in the past year has ranged from the high-$500,000’s up to $800,000. The median price was $643,000 for the 18 homes that closed in September. The Days on Market for the homes that closed in September was 48 days. This is down from 82 days last month.

Petaluma: The inventory in Petaluma at the end of September (93) is 37% ahead of the inventory in September 2017 (68) and it is 5% ahead of the inventory last month (89). There were 45 new sales for the month. This is 7% ahead of the 42 sales in September 2017 and it is 21% below the number of new sales last month (57). The Petaluma market currently has 2.1 months of available inventory based on the current sales pace. Petaluma remains one of the tightest markets in Wine Country. The median price of the 43 homes that closed in September was $740,000. This is 11% above the median price last September ($665,000). The Days on Market for the 43 homes that closed in September was 55 days.

Rohnert Park: The inventory of homes and condominiums for sale in Rohnert Park at the end of September (68) is the highest since November 2011 at the end of the recession. The inventory is 258% ahead of the inventory in September 2017 (19) and it is 13% ahead of the inventory last month (60). There were 49 new sales in Rohnert Park in September. This is 20% higher than the number of sales in September 2017 (41) and it is 32% ahead of the inventory last month (37). There is 1.4 months supply of inventory based on the current sales pace. The median price ($517,000) of the 34 homes and condominiums that closed in September is 4% higher than the median price a year ago ($499,000). In September 2010, the median price was $192,000. The Days on Market for the 36 homes that closed in September was 41days.

Russian River: The inventory of homes and condominiums for sale at the end of September (75) in the Russian River area (Guerneville, Monte Rio and Rio Nido) is 19% ahead of the level of September 2017 (63) and it is 9% below the inventory last month (82). There were 33 new sales for the month of September. This sales pace is up 18% from the pace in September 2017 (28) and it is 22% ahead of the pace last month (27). There is a 2.3 months supply of inventory in the Russian River based on the current sales pace. The median price in the Russian River has ranged from about $400,000 to the low $500,000s over the past year. The median was $430,000 for the 15 homes that closed in September. This is 6% below the median price in September 2017 ($458,000). The Days on Market for the 15 homes that closed in September was 48 days.

Santa Rosa: Forty percent of the available inventory in Sonoma County is in the City of Santa Rosa. The inventory of homes and condominiums for sale in the City of Santa Rosa at the end of September (485) is 76% ahead of the inventory of a year ago (275) (that’s a big increase) and it is 3% below the inventory last month (498). New sales in September (195) are 15% ahead of the pace of last September (170) and they are 9% ahead of the pace last month (179). There is a 2.5 months supply of available homes in Santa Rosa based on the current sales pace. The median price of the 151 homes closed in September in Santa Rosa was $600,000 compared to $549,000 a year ago – a 9% increase. The Days on Market for the 151 homes that closed in September was 61 days.

Sebastopol Trends: The inventory of homes and condominiums for sale at the end of September in Sebastopol (74) is 28% ahead of the level of September 2017 (58) and it is 11% below the inventory last month (83). There were 29 new sales for the month of September. This is 26% ahead of the pace in September 2017 (23) and it is 10% ahead of the pace last month (25). There is a 2.6 months supply of inventory in Sebastopol based on the current sales pace. The 20 homes that closed in Sebastopol in September went from listing to pending in 58 days.

Sonoma Valley: The number of available homes and condominiums for sale (118) at the end of September in the Sonoma Valley (Sonoma, Glen Ellen and Kenwood) is 25% below the inventory last September (158) and it is equal to the inventory of last month (118). There were just 34 new sales for the month. This is 6% below the pace of sales in September 2017 (36) and it is about equal to the pace of last month (35). There is a 3.5 months supply of inventory in Sonoma based on the current pace of sales. Two thirds (78) of the inventory in the Sonoma Valley is priced at $1,000,000 or above and one-third of the new sales (11) in September were priced at over $1,000,000.

The high-end quartile (top 25%) of inventory in the Sonoma Valley at the end of September starts at $3,000,000. 21 homes closed in the top quartile in the past twelve months compared to 12 in the twelve months prior to that. There are 30 homes available in this quartile in September 2018 compared to 42 a year ago. There were three new sales in the top quartile in September creating a 10 months supply of inventory in this quartile based on the current sales pace. The closed homes over the past year closed at a price of roughly $1,000 per square foot of building area.

Windsor: The inventory of homes and condominiums for sale in Windsor at the end of September equals 49 properties. This is 17% ahead of the inventory in September 2017 (42) and it is 22% below the 63 homes last month. There were 27 new sales for the month. This is 29% above the pace of sales in September 2017 (21) and it is just slightly below the pace of last month (28). There is a 1.8 months supply of inventory based on the current sales pace. The days on market for the 24 homes that closed in September in Windsor was 58 days. The median price ($660,000) of the homes closed in Windsor in September is 5% higher than the median price a year ago ($630,000).

Napa County: The inventory of homes and condominiums available for sale in Napa County at the end of September (412) is 12% ahead of the inventory in September 2017 (367) and it is 2% ahead of the inventory last month (404). New sales (122) are 17% ahead of the pace of last year (104) and are slightly ahead of the pace of last month (118). There is a 3.4 months supply of inventory based on the current sales pace. The Days on Market for homes closing in Napa County is currently 59 days. For the purpose of our MLS (BAREIS) “Days on Market” represents the time from when the property is first listed in the MLS to the date the property goes into “pending” (all conditions removed) status. On average, it can take anywhere from 0 to 30 additional days for properties to close after going pending. The median price of the 106 homes closed in September in Napa County ($685,000) was 11% higher than the median price of a year ago ($615,000). The median price of the homes closed last month was $715,000.

Napa County Luxury Homes: If one takes the highest quartile (25%) of available inventory as the “Luxury Market”, the Luxury Market begins at $2,100,000 in Napa County at this time. The number of closings (76) of Luxury Homes (sales price in excess of $2,100,000) in Napa County for the period 10/1/17 to 9/30/18 compared to 72 sales for the period 10/1/16 to 9/30/17. There were 104 luxury homes in inventory at the end of September 2018 compared to 104 at the end of September 2017. There were 17 new Luxury Home sales last month resulting in a 6.1 months supply of available Luxury Homes based on the current sales pace compared to 3.4 months supply for the County as a whole.

American Canyon: There were 29 available homes and condominiums in inventory at the end of September in American Canyon. This is 26% ahead of the inventory a year ago (23) and it is slightly below the supply last month (30). New sales (12) were equal to the pace of September 2017 and they were 33% below the pace of last month (18). There is a 2.4 months supply of inventory based on the current sales pace. The Days on Market for homes that closed in American Canyon last month was 38 days. The median price of the 13 homes that closed in American Canyon in September ($568,000) was 1% ahead of the median price of a year ago ($560,000). The median price in September 2009 was $275,000.

Napa: Fifty-five percent of the inventory in Napa County is in the City of Napa. There were 227 available homes and condominiums in inventory at the end of September in the City of Napa. This is a 17% ahead of the supply at the end of September 2017 (194) and it is slightly ahead of the inventory at the end of last month (224). New sales (91) were 26% ahead of the pace of September 2017 (72) and they were 20% ahead of the pace of last month (76). There is a 2.5 months supply of inventory based on the current sales pace. The Days on Market for the 74 closings last month was 53 days. The median price of the 74 homes that closed in the City of Napa in September was $678,000. This is 7% ahead of the median price of the homes closed in September 2017 ($635,000).

Up Valley Napa County: The inventory of homes and condominiums for sale in the Up Valley Napa County market (Angwin, Calistoga, Deer Park, Oakville, Rutherford, St. Helena and Yountville) at the end of September (122) is slightly below the level of 125 in September 2017 and it is essentially equal to the level last month (119). There were 17 new sales in the month compared to 17 a year ago and 24 last month. There is now a 7.2 months supply of inventory based on the current sales pace. The Days on Market for the 17 closings last month was 96 days. Approximately 56% of the Luxury Market inventory (price in excess of $2,100,000) in Napa County is in the Up Valley Market (58 homes). There were five luxury home (price in excess of $2,100,000) closings in the Up Valley Market last month and seven new luxury home sales.

Angwin: The inventory of homes and condominiums for sale at the end of September in Angwin (16) is 27% below the level of September 2017 (22) and it is essentially equal to the inventory last month (17). There were no new sales for the month of September compared to two last month and two in September of 2017. There is a 16 months supply of inventory based on the current sales pace. The average asking price of the 16 homes in inventory in Angwin is $1,280,000.

Marin County: It’s interesting to observe that the inventory of homes and condominiums for sale at the end of September in Marin County (534) jumped 38% on a month over month basis and jumped 25% on a year over year basis. This is the highest inventory for any month in Marin County in the past four years. It will be interesting to see if this inventory begins to subside in October and beyond.