The Sonoma Valley communities of Kenwood, Glen Ellen, and Sonoma had an extremely active second quarter, with a greater percentage of properties under contract than we’ve seen in more than a year-– despite low inventory. Homes sold in June 2012 sold in half the time it took in June 2011.
Homes selling for less than $1,000,000 were the most active in the second quarter, with many homes receiving multiple offers. Homes selling for more than $1,000,000 picked up significantly with a growing interest among buyers. Investors were very active in the area, as well as second-home buyers in the higher end of the market.
Although home prices rose significantly during the second quarter, prices still remain below 2006 and 2007 peak levels. Sellers received an average of 97% or more of their asking price– a large improvement from previous quarters.
What’s to Come: If the Bay Area economy continues to grow, the Sonoma Valley will increase real estate sales activity through the end of the year. Prices are expected to continue rising; hopefully encouraging sellers to step off the sidelines. This could help create a balanced market.
NAPA COUNTY
With sales continuing to climb higher and higher–month over month, Napa County had solid growth in the second quarter. Sales in Napa could have been higher, but due to limited inventory sales were constrained. Bay Area sellers are holding off listing their homes in the hope of higher prices in the future.
Home prices increased 2.5% from the first quarter of 2012, and looking back to the fourth quarter of 2011, prices are up more than 6.5%! Higher prices are beginning to materialize.
What’s to Come: Even though the second quarter was strong, it looks like the third quarter will be even more successful. Year over year sales growth will continue to grow, even though July and August normally see a seasonal slowdown. Home prices will continue to rise, too, and the supply of homes for sale will slowly swell.
SONOMA COUNTY
From June 2011 to June 2012, the median sales price of homes in Sonoma County rose more than 12%; while inventory shrank two-thirds. The number of homes in contract also jumped significantly– 125% just in the second quarter. The average days on market also shrank by 45%.
The market is growing aggressively; the lower the price, the greater the likelihood of multiple offers. Another encouraging sign– we saw a decrease in the number of bank-owned homes and other distressed properties for sale in this quarter.
What’s to Come: The real estate market is still recovering from its collapse in 2008; the coming year will see progress in that direction. Prices will continue to rise as will inventory, creating a healthy, balanced market. The market for $1,000,000+ homes will continue to gain momentum, a result of the Bay Area’s strong paced economic recovery.