Sonoma Median House Sales Prices By Month
For the past 11 months, since the spring 2015 market began, the median house price in Sonoma County has been bouncing up and down between $525,000 and $545,000. Monthly fluctuations in median sales price do not necessarily say much about changes in fair market value since they are affected by a number of factors, but, for what it is worth, the median price this past February was 11% higher than in February 2015.
The trend since 2011 has been one of substantial home-price appreciation, though the Sonoma median is still below its 2006 peak-of-bubble price. (Appreciation trends will vary by city and town.) In coming months, once the new spring selling season really gets started, we will get a better sense of the direction of the market in 2016, and see if the recent financial market volatility will have any sustained effect.
Where to Buy a Home in Sonoma
for the Money You Want to Spend
This chart illustrates the strength of the market for well-priced homes in Sonoma: On average, they sell relatively quickly for full list price. It also shows the dangers of overpricing: the Sales Price to Original List Price percentage plunges, and average days on market jump to almost 2 months longer. And hundreds of listings do not sell at all, but simply expire and are withdrawn from the market. Contrary to common belief, most buyers will not even make offers on listings they believe to be significantly overpriced.
Mortgage Interest Rate Trends
Short-Term Changes since the Fed Raised Rates
Since the Federal Reserve Bank raised the benchmark interest rate in mid-December, interest rates have actually dropped by about 8% (as of March 3), which makes a significant difference in monthly mortgage costs and loan underwriting qualification. This downward pressure on rates is generally ascribed to the volatility in the stock market since the year began. (Investors often pour money into bonds in times of stock market volatility, which then lowers the interest rate.) It is famously difficult to predict interest rate movements, which can be sudden and dramatic, but for the time being, they are getting closer to the all-time low in 2013. While it lasts, that is good news for the Sonoma real estate market.
Bay Area Housing Affordability by County
The California Association of Realtors recently released its Housing Affordability Index (HAI) for the 4th quarter of 2015, and above are 3 of 10 charts in our updated analysis. Sonoma is the second most affordable county in the Bay Area after Solano, and much more so than Marin, San Francisco and San Mateo, the latter two being at the heart of the high-tech boom and approaching historic lows in housing affordability. Interest rates play a big role in this calculation and, as noted earlier, have been falling in 2016.
Our full report: Bay Area Housing Affordability
Long-Term Median Price Trends for Selected Sonoma Communities
These analyses were made in good faith with data from sources deemed reliable, but they may contain errors and are subject to revision. Statistics are generalities and all numbers should be considered approximate. Sales statistics of one month generally reflect offers negotiated 4 to 6 weeks earlier, thus a fair number of YTD 2016 sales reflect market activity in late 2015.