Housing market is good for many but not all

Sonoma County home affordability stays out of reach for thousands

Owning a home in Sonoma County remains a dream for many, but it is also a nightmare for others. County homeowners continue to enjoy record low mortgage rates and steadily rising home equity balances. But buying or renting a home here has never been more expensive — or more out of reach for more families. This is a “two-sidedcoin story” that has defined the region’s housing market since at least the recession of 2008 and the nationwide collapse of the housing bubble.

On top of that, Sonoma County’s recent destructive wildfires and a pandemicimpacted economy have foiled a stronger real estate market recovery and housing cost affordability.

The median price of a home in Sonoma County at the end of August was listed at $780,000 in one local market report. In another report, based on actual sales in the month, that average sales price was $870,000, boosted by the number of sales of “luxury properties” costing more than $1.8 million. In Healdsburg alone in August, the average house price was $1,615,000.

In other local markets for August, the average home price in Sebastopol was $972,500, Cloverdale was $765,000 and Windsor was $760,000. The average number of days on the market was 44.

Local real estate agents and their selling clients had plenty to smile about, as the average sales price was 100% or above the listed or asking price, according to the regional multiple listing service (MLS).

Overall, county home prices are slightly lower than they were a few months ago, thanks to a modest increase in property listings. Historically, Labor Day and the last days of September mark a slowdown of real estate market activity as families settle into a new school year or new job.

Other news about homes and housing in Sonoma County right now includes continued wildfire rebuilding, construction projects to “harden” rural properties with fire prevention measures, pending new state laws to allow auxiliary dwelling units, split-lot zoning, fast-track developments around transit hubs and other issues pitting YIMBYs (yes in my backyard) versus NIMBYs (not in my backyard.)

Homelessness and the lack of affordable rental units are the top concerns (nightmares) for others. While many Bay Area people and others keep shopping for a Sonoma County wine country home, as many as 40% of the people already living here can’t afford the median home cost of $780,000 without a subsidy or sacrifice. The average family rental unit monthly rent is $2,000 and difficult to find.

California state housing officials’ and Association of Bay Area Government (ABAG) housing targets continue to go unmet by local governments. An overall target for unincorporated Sonoma County is 16,800 new housing units needed. The state’s 8-year targets (20232031) include 476 new units for incorporated Healdsburg, 278 units for Cloverdale, 213 for Sebastopol and 994 for Windsor.

Housing construction in Sonoma County faces multiple cost pressures including raw land costs, local government fees, restrictive Urban Growth Boundary zones, very high hard costs of lumber and other building materials and a shortage of labor.

For long-term solutions, Gov. Gavin Newsom just signed three major pieces of housing legislation into law. The bills include SB 8, which extends an existing law maintaining limitations on local governments’ ability to “downzone” neighborhoods without planning to increase density in other neighborhoods. Another, SB 9, lets property owners build a duplex on a single-family lot or divide the property into a total of four units. SB 10 empowers cities and counties to pass ordinances allowing streamlined construction of up to 10 units on a single parcel.

And, for all of the housing issues and challenges listed above, each requires an asterisk to note the added unknowns from the ongoing COVID-19 pandemic that continues to dominate the local labor market, consumer prices and general economy.

Photo Rollie Atkinson Sonoma County’s houses have been selling at 100% or above the listed or asking price.

— Rollie Atkinson House & Home Fall 2021 5