Sonoma County Real Estate Prices & Trends

Though Covid-19 upended many normal seasonal trends this year, and then the fires added their impacts, the market did begin its typical “holiday season” slowdown in November - however activity remained well above levels of last year. It is unknown how the latest pandemic circumstances may affect the market in December, which is usually by far the slowest month of the year. 

As is typical, the number of new listings plunged in November. In the first week of December - not illustrated on this chart - new listing activity ticked back up from the short Thanksgiving week but remained far below pre-November numbers. December is usually the month with the fewest new listings coming on the market. 

Market activity as measured by the number of listings going into contract peaked in mid-summer. Though dropping in November - as is the normal seasonal trend - the number was 50% higher than in November 2019.  

The below chart measures demand as compared to the supply of listings available to buy, i.e. the percentage of active listings going into contract during the month. The percentage in the fall of 2020 ran far above the same period of last year. 

Months-supply-of-inventory is another measure of demand vs. supply, but with this metric, lower readings signify higher-demand markets. 

Despite the fires, Sonoma was one of the top 4 Bay Area Counties as measured by the increase in dollar-volume sales. (By unit sales increase, it was one of the top 3 - not illustrated on this chart below.) 

Highest priced listings on the market in early November, and the highest-priced MLS home sales occurring May through October 2020, by Bay Area County. 

Interest rates hit yet another all-time low in early December. 

The long-term median sales price chart below is similar to those for counties around the Bay Area - a significant spike in median house prices since the pandemic struck in early spring. 

An illustration of market seasonality, the effect of recent crises and how the market subsequently rebounds. 

The number of sales in recent months remains elevated, though declining from the pre-fire, mid-summer peak. 

Home sales breakdown by price segment and bedroom count: Sonoma County has a substantial market for luxury homes and estates, but the vast majority of homes sell for under $1,000,000. 

Following is a series of analyses that look at city sales volumes and median sales prices, luxury home sales, listings for sale, and 2 standard measurements of supply and demand. 

Regarding the next chart: Percentages of 50% or more would typically be considered to reflect a high-demand market. Over 60% signifies very high demand, or as it climbs, extremely high demand. High price markets often, but not always, see softer supply and demand indicators. 

Our hearts go out to so many of our friends and neighbors affected by these terrible fires, and our gratitude is too deep for words to those fighting the fires and assisting those needing help. We continue to issue market reports during these times of such difficulty simply because there are still people who have to make decisions regarding the purchase and sale of homes. 

The table below compares Q3 statistics across 5 years.

Median sales prices can rise because of increases in fair market value – i.e. buyers are paying more money for the same home (supply and demand) – and/or because buyers are purchasing larger, more expensive houses, often in more expensive communities. Both dynamics are currently at play, but it is certain that affluent and very affluent buyers have made up a dramatically increasing percentage of the demand in Sonoma County and other Bay Area markets. 

Annual percentage changes in median house sales price: The 2020 YTD percentage will almost certainly change, one way or another, by the time full-year sales data is in. 

The increase in the sales of very expensive homes in Sonoma County has been astounding. 

In September, we also updated our semi-annual Survey of Bay Area Markets. 

In the context of the terrible fires we've seen in recent weeks, a real estate report may seem trivial, but we have clients still trying to make buying and selling decisions, and we feel it remains our job to deliver straightforward data on the market. 

This second chart looks at activity by MONTH, which gives more historical context to the size of the market rebound since the pandemic first hit. 

Year-to-date house sales volumes and median house sales prices by city: 

Bay Area median house sales prices, summer 2020: There are a number of reasons why the Sonoma County market is seeing such high demand, but one of them is simple affordability. One gets much more for one's money here than in most counties further south. 

Long-term median house sales price trends: 

A review of year-over-year changes in the number of luxury home sales around the Bay Area this past summer. Most counties have seen substantial increases, but Sonoma County saw a stupendous 176% jump in high-price sales.  

A breakdown of sales in Sonoma and Napa Counties by era of construction: 

The number of listings on the market remains very low by historical standards. 

The number of active listings broken out by price segment: These numbers change daily as new listings arrive and existing listings go into contract. 

A breakdown of listings priced $2 million and above, by city, in Sonoma and Napa Counties. These numbers constantly change with market activity. There are a lot of very expensive listings in the 2 counties.

A breakdown of sales by lot size: Larger lot sizes and acreage play a much bigger role in Sonoma home sales and values than in most Bay Area Counties.  Still the great majority of sales are on lots of .25 acre or less. (The median lot size in San Francisco is less than .06 acre.)

Market indicator: The percentage of listings accepting offers within month - an excellent illustration of what's occurring in the Sonoma market. 

Market indicator: Price reductions - in higher demand markets, the number of price reductions declines. 

As compared to sales volume, the Sonoma County market is somewhat over-weighted in the number of expensive homes listed for sale. However, this relative imbalance in supply and demand is actually significantly reduced in scale from what has been the case in recent years.

This table ranks each county by the percentage of active listings going into contract in June/July 2020 - a standard statistic of market heat - compares it to the same period of last year, and then rates the scale of the year-over-year change.