The Schenone Gatton Team is Proud to Present
THE SONOMA COUNTY RESIDENTIAL REAL ESTATE REPORT Q3 2023
Hello Friends, We hope this newsletter finds you and yours in good health and enjoyed the end of Summer and transition to Fall. If this is the first time you have received our newsletter, this report aims to provide sales trend information to Sonoma County homeowners along with pertinent information to the climate of the current market. We all have unique financial goals, and it is important that we equip ourselves with the most accurate and reliable information available. By doing so, we increase our chances of making sound financial decisions.
SONOMA COUNTY Q3 SALES INFO ** SFR Avg. List $
SFR Avg. Sale $
Condo Avg. List $
Condo Avg. Sale $
Petaluma
$1,571,000
$1,081,000
$630,000
$667,000
Penngrove
$1,858,000
$1,410,000
N/A
N/A
Cotati / RP
$1,199,000
$763,000
$464,000
$440,000
Santa Rosa
$1,690,000
$967,000
$563,000
$463,000
SE HABLA ESPAÑOL
Windsor
$1,331,000
$869,000
$577,000
$430,000
THE CURRENT MARKET
Sebastopol
$1,868,000
$1,194,000
$681,000
$648,000
The current real estate market continues to demonstrate remarkable strength, marked by robust demand and soaring property values throughout Sonoma County. Previously lowinterest rates, a growing population, and a desire for more space in the wake of the COVID-19 pandemic have all contributed to this resilience. However, the most significant challenge facing prospective buyers and the market as a whole is affordability. The escalating prices of homes, a significant rise in interest rates, combined with limited housing inventory in many areas, have made it increasingly challenging for first-time buyers to enter the market and for existing homeowners to upgrade.
Sonoma
$3,404,000
$1,849,000
$655,000
$929,000
This affordability issue has led to concerns about the potential for a housing bubble and highlights the need for policymakers, developers, and real estate professionals to find creative solutions to address the growing gap between housing costs and the average household income, ensuring that the strength of the real estate market remains accessible to a wider range of buyers. However, it is unlikely that a bubble will occur due to simple supply and demand economics, and more stringent underwriting for borrowers. The average Sonoma County (Santa Rosa - Sonoma Petaluma - Windsor - Rohnert Park / Cotati - Sebastopol Penngrove) sales price for Single Family Homes (SFR’s) in Q3 was $1,098,000, with Condos & Townhouses selling at $516,000. It is clear that Sonoma County continues to benefit from the erosion of our Bay Area cities, as many Bay Area tenants continue to migrate to the suburbs in search of safer communities and growing job opportunities. See the breakdown for each individual Sonoma County City, along with graphs for the area specified in this report.
City
**Please note that these numbers are provided by Trendgraphix reports.
SINGLE FAMILY PERFORMANCE LAST 12 MONTHS
CONDO/TOWNHOME PERFORMANCE LAST 12 MONTHS
AFFORDABITY & INTERST RATE SNAPSHOT
SINGLE FAMILY RESIDENCES FOR SALE VS. SOLD
Over the last 24 months, mortgage interest rate trends have shown notable fluctuations, reflecting the influence of economic factors, including the response to the COVID-19 pandemic and shifts in central bank policies. In the immediate aftermath of the pandemic's onset in early 2020, mortgage rates plummeted to historic lows as central banks around the world implemented aggressive monetary policies to stimulate economies and provide relief. This led to a surge in refinancing activity and a rush of new homebuyers entering the market. Rates remained exceptionally low throughout most of 2020 and early 2021, with 30-year fixedrate mortgages often hovering around 2.5% to 3.0%. However, as the global economy began to stabilize and concerns about inflation and rising government bond yields emerged, mortgage rates started to creep upward in the latter half of 2021. By mid-2022, they had climbed to levels exceeding 3.5%, signaling a departure from the ultra-low rate environment that had characterized the previous year. Currently, interest rates have continued to climb and are around the 7.5% range. Market experts suggest that this upward trajectory is likely to continue, albeit gradually. The pace of rate increases is expected to be influenced by factors like inflationary pressures, the actions of central banks, and the broader economic recovery. Therefore, prospective homebuyers and homeowners looking to refinance should closely monitor the evolving interest rate landscape and be prepared for the possibility of moderately higher rates in the coming months. As these rates eventually decline, demand will significantly increase. Affordability for many prospective homebuyers is heavily influenced by these rates by leveraging numerous low-downpayment type loans. Some loan options require as little as 3.5% down in order to purchase, thus making a monthly mortgage payment more challenging. There are a number of creative ways however to help navigate these challenges, and having a knowledgable local real estate agent and lender guiding this process can make all the difference. If you are in need of a referral for a great local lender, we are happy to provide you with a list of lenders we trust and regularly work with.
MORTGAGE RATES CHART **
**Please note this chart represents weekly averages for a 30-year fixed-rate mortgage. Average for 2022-23 as of September 6, 2023. Source: Freddie Mac PMMS. (c) TheMortgageReports.com.
CONDOS / TOWNHOMES FOR SALE VS. SOLD
ANALYSIS OF CHARTS As illustrated in the above charts, you will notice a relatively low number of homes for sale in our outlined area of Sonoma County (Petaluma - Penngrove - Rohnert Park / Cotati - Sebastopol - Santa Rosa, Windsor - Sonoma). Those homes are also being sold at a fast rate. This trend has been continuous for a number of years now, keeping us in a strong sellers market. A sellers market is defined as having less than 4 months of inventory available in any given market. Meaning that if not another single home came on for sale, that the existing inventory would be completely depleted within that time frame. Currently, we are still below this threshold and holding steady in a strong sellers market. See below for an illistration of the last 12 months.
ALL RESIDENTAL PROPERTY - MONTHS OF INVENTORY
ADVANTAGES OF HOME OWNERSHIP VS. RENTING Owning a home offers numerous advantages that make it a significant milestone in many people's lives. Firstly, it provides a sense of stability and security, as homeowners have a place they can call their own, free from the uncertainty of rental agreements. Homeownership also serves as a long-term investment, often appreciating in value over time, which can build wealth and financial security. Additionally, homeowners have the freedom to personalize their space, allowing them to create a comfortable and personalized environment that suits their lifestyle and needs. Moreover, owning a home can lead to tax benefits, such as deductions for mortgage interest and property taxes. Finally, it fosters a sense of community and belonging, as homeowners often become more engaged in their neighborhoods and take pride in their role as responsible property owners. Overall, owning a home offers a multitude of benefits that extend beyond mere shelter, making it a cherished goal for many individuals and families.
SCAN QR TO KEEP CURRENT ON YOUR HOME’S VALUE EXPERTISE AND MARKETING MATTERS As we always say: knowledge is power. Whether you are planning to sell or hold for the foreseeable future, it is imperative to take the time to educate yourself on the fine points of the rental market. It is also essential to surround yourself with the best professionals in their respective fields who can help you navigate this ever-changing legislation. For those who plan on holding, keeping pace with market rents and maintaining acceptable property conditions is important. Neglecting property maintenance can significantly decrease its market value when it finally comes time to sell. Furthermore, the role of property in the success of these investments cannot be overstated, whether the owner or a third-party vendor handles it. Minimizing expenses and maximizing income will be critical factors in achieving financial viability, and establishing guidelines for effective property management is therefore crucial. Instituting a plan for achieving market rents can significantly increase property values at the time of sale since most investors and lenders alike now only value actual rents. There are a handful of professionals we trust implicitly and are always happy to offer a referral to our vendors, managers, financing, and legal vendors. We welcome the opportunity to discuss how we may add value to your real estate investment. If you are considering selling now or in the near future, we would love the opportunity to discuss a tailored sale strategy coupled with the very best marketing available. While the market is certainly more complicated, sales and purchases will continue, and making good decisions is the key to thriving in changing markets. Sonoma County will continue to be appealing to many investors seeking a fair return and a stable asset, regardless of the current state of affairs For investors seeking to invest in Sonoma County, it is important to be patient but also creative.
Waiting for the right home to appear on the market may be a long wait, so it is important to develop a relationship with a broker who specializes in the area and product type that you are looking for. This will increase the odds of finding a suitable property, even if it is not currently on the market. We are of course happy to help.
Here are a few questions you should ask yourself prior to selecting an agent: 1. Is the agent local and do they have vast experience in this segment of the market? Ask to see a 5-year production report for properties like yours. Make sure that these numbers reflect their production only, not the office. Ask the agent to detail their experience during this challenging shift in rates over the last couple of years to find out how they will help you navigate this market. Lastly, ask where he/she resides. 2. Does the agent have an understanding of the market? Ask a few pointed questions which you may already know the answer to. Ask about the average list to sold price in your city, and the current average days on market. Ask to see some current comps. 3. How will he/she present your property in its best light? In a market where many buyers have more knowledge than real estate agents, it is important to know how your agent will answer buyer objections. Do a little role-playing and see how he/she answers your tough questions and matters of negotiation. How will the agent navigate potential seller concessions during the marketing and sale? 4. Ask to see detailed examples of marketing packages. During normal markets, just listing on the MLS and hoping for a great offer is not enough. Find out exactly how he/she is going to safely and virtually market the property, and make sure to ask to see examples of their previous listings. 5. Is the agent just trying to make a commission, or does he/she truly have your back, even if it is against their own financial interests? If you ask items 1-4, you will likely get to this answer.
OUR LISTINGS
1.6 ACRES FOR SALE PRICE: $799,950 2 BED | 1 BATH BUILDING 1,045 SQFT 9012 Mill Station Rd. Sebastopol, CA 95472
JUST SOLD!
MULTIPLE OFFERS PRICE: $823,750 3 BED | 2.5 BATH BUILDING 2,204 SQFT 1101 San Antonio Dr. Rohnert Park, CA 94928
The Schenone Gatton Team Sonoma County Real Estate Experts DRE# 00962373 | 02040447
707-217-9775 | 707-217-0587 *SE HABLA ESPAÑOL SchenoneGattonTeam@gmail.com SchenoneGatton.com @SchenoneGattonTeam @SchenoneGattonTeam @TheSchenoneGattonTeamRealEstateTeam
THE SONOMA COUNTY RESIDENTIAL PROPERTY REPORT Q3 2023
Dear Reader, If you are planning on selling your property sooner or later, we would appreciate the opportunity to provide you with an obligation-free comparative market analysis and marketing proposal. Obtaining the highest possible price for your property takes careful consideration. Our market analysis includes an “as is” value, as well as partially repaired and fully repaired values. We provide a comprehensive list of recommended repairs and obtain competitive bids that will help you achieve the best possible return on your home. If a repaired strategy is pursued, we will oversee all repairs from beginning to end. We have successfully helped hundreds of home owners achieve extraordinary results, and hope for the opportunity to show you how we can do the same for you. As usual, we are a phone call or email away if you have any questions. As seasoned agents, we will always have your best interests at heart. Thank you for your loyalty,
Gloria Schenone & Cody Gatton
The Schenone Gatton Team