This report is generated around the 10th of each month once the previous months numbers have been posted. What we see here is a report generated for the Sonoma County Housing Market through December 2021. So we are always looking a month behind. Our statistics are derived from the Bay Area Real Estate Information Services (BAREIS) This is the Multiple Listing Service provider for all real estate brokerages in Sonoma County. If you have questions or wish to know a more specific account of your properties value and the timing of either selling or buying we are always happy to jump on a Zoom or meet with you at your property to evaluate and discuss a strategy. We can be reached via cell/text 707.580.3499 or email us at concierge@elitepartnersrealestate.com
Is there an end in sight? While our Fall months brought us a much calmer housing market we still have some real issues when it comes to inventory. In December 2021 we sold 427 homes. This is a -12.5% decrease from a year ago and a -36.6% month over month. Buyer activity has slowed significantly. Our inventory level remains at extreme lows with only 267 homes for sale in December 2020 which was a -53.4% decrease from December 2020 and a -61.9% decrease from December 2019 pre-pandemic statistics. We did sell +21.7% more home than we did back in 2019. This month seems to be very low across the board and is a red flag if we continue on this track. January will be a good indication of how we are moving. To be down this much in December is much more than a seasonal lull.
Our average price per square foot took a good month over moth hit with a -4.7% decrease while still maintaining an appreciation rate of +12.7% year over year. All indications are looking like we may see home prices start to depreciate by years end. The Federal Reserve has announced they plan to raise rates as much as four times or 3/4 to 1 percent over the next year. We are already seeing mortgage interest rates back into the 3+% range. This depreciates the buyers power to afford more home. Prices will have to come down to match the buying power with higher interest rates.
The average price of a home in Sonoma County for December 2021 was $923,000 which was a -5.6% decrease month over month and a +15.2% appreciation year over year. One concern I see is our current listed price inventory number. This has skyrocketed in the last few months to an all time high of $2,106,000. This is due in part because we have a lot more expensive homes on the market in Sonoma that simply are not selling and agents not willing to have educated conversations with seller are pricing homes much higher than they should be. We have never seen the list price to sold price be double in the past.The year over year active price is +46.6% higher. Unfortunately this is going to cause for a lot of seller drama in the coming months as their home sits on the market with zero buyers willing to spend outrageous amounts on homes.
The end result is yet undetermined as to where are values are headed. All indications are lower by the end. of the year. I do foresee a robust Spring and perhaps a solid Summer selling season but with rates climbing, buyers simply will not be able to afford as much of a home. gone is our cash flush suburban seeking bay area buyer. They have gotten smart and are looking more for deals than over priced homes. Sonoma is the only county facing this extreme housing difference between listings prices and sold prices. With inventory so low prices should remain somewhat even over the coming months with again a slow down heading back in too late fall early 2023.
The opinions expressed in this report are those of Don McDonald, Founding partner, and REALTOR with RE/MAX Elite Partners brokered through RE/MAX Gold. They are not in any way intended to express what RE/MAX, RE/MAX Gold or any other agent or brokerage may think. It is my honest analysis backed but some market data. Check back each month around the 25th or so for an update as we continue down this path.
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