Sonoma Housing Bubble

Pulling the cork out of Sonoma's bubbly housing foolishness

Friday, May 26, 2006

Which Came First? Decline in Home Sales or...

...Decline in Reporting Quality?

This is the title of today's Press Democrat article on the housing market: "Home sales plummet in North Bay, state"

written by: Michael Coit of THE PRESS DEMOCRAT

"April home sales tumbled across California and the North Bay, with rising interest rates keeping more buyers out of the market, the California Association of Realtors reported Thursday."

"Home sales have been declining since fall. But April's 21 percent drop was particularly steep because the sales total a year ago was the second-highest ever for the state."

1. Old news. We have had the April numbers for the north bay for a couple of weeks now.

2. I thought this was about sales plummeting in the North Bay and the state? Where are the actual sales numbers about the North Bay in this article? Did he not put "North Bay" first in the title leading one to believe that the plummeted sales would be the main subject?

"The statewide median resale price was $562,380, a 10 percent increase over a year ago."

3. Just for kicks... here is the Sonoma County median since he neglected to report it:

The April median resale price was $596,925, the second consecutive month with little change compared with prices a year ago.

Sonoma: $618,000
Glen Ellen: $714,000
Sebastopol: $618,500
Petaluma: $649,500
Healdsburg: $655,000
Penngrove: $942,500
Cotati: $672,000
Windsor: $594,475
Rohnert Park: $580,000
Santa Rosa: $570,000

"The greatest gains were on the Central Coast, in Los Angeles and in the Inland Empire."

4. What are those numbers and what were the gains?

"Prices were up 5 percent to $638,680 in the association's Northern Wine Country region of Sonoma, Napa and Mendocino counties."

5. Ah... this must be what he meant by "North Bay." He combined Sonoma, Napa and Mendocino County data to get a higher median price so he could claim the 5 percent gain. However, Sonoma County did not enjoy a 5% gain. Median price was only a hair above 2005. Sonoma County posted a 0.90% gain.













"Statewide, homes took 42 days to sell compared to 28 days a year ago. Slowing sales have boosted the statewide inventory of homes for sale to a 5.6-month supply compared to 2.4 months a year ago."

6. Interesting state data. Let's talk about Sonoma County data... since the North Bay numbers seem to be lacking here, I feel compelled to go ahead and help Michael out and re-post yet again the Sonoma County data. Wouldn't want any potential fools to think that the state data was representative of Sonoma County data and go rushing in to hold the bag for some over-extended flipper.

According to rereport.com's April Data for Sonoma County the average count for Days on the Market is: 85 In April of 2005 it was 59

Sonoma: 100
Glen Ellen: 217
Santa Rosa: 90
Rohnert Park: 69
Petaluma: 55
Sebastopol: 87
Penngrove: 98
Healdsburg: 90
Cotati: 132
Windsor: 75

Sonoma County has 3425 listings on the mls.

7. At the current rate of sales based on April data that translates into 9.01 months of inventory on the market.

8. Since Michael mentioned Napa and apparently used at least the pricing data to make that laughable 5% gain claim, according to dataquick: From April 2005 to April 2006, sales in the state fell most in Napa County, down 39 percent.

9. When your sales are down almost 40% just how long are those prices going to rise? Fundamental law of supply and demand... when there is no demand, prices will fall.

10. According to Ziprealty the number of Sonoma County houses with recent price reductions is: 871

Sales for Sonoma County were down -24.60%

380 homes were sold in April of 2006 compared with 504 for April 2005.

Bodega Bay -42.90%
Cloverdale -26.70%
Cotati -45.50%
Guerneville -13.30%
Healdsburg -26.70%
Petaluma -32.40%
Rohnert Park -28.60%
Santa Rosa -21.60%
Sebastopol -18.50%
Sonoma Valley -47.90%

So with all that down data what was it that allowed the county only a -24.60% decline?

ah... glad you asked.

Forestville sold 9 properties with an average of 110 days on the market, and had an 80% gain from last year.

Glen Ellen sold 2 properties with an average of 217 days on the market, and had a 100% gain from last year.

Windsor sold 38 properties with an average of 75 days on the market, and had an 18.8% gain from last year.

8 Comments:

At 5/26/2006 11:35:00 AM , Blogger Rob Dawg said...

The only way those sales/list price ratios are even remotely close if if they call the reduced price the new list price. Even then i don't believe it.

 
At 5/26/2006 11:54:00 AM , Anonymous tom stone said...

just anecdotal,i was hanging out in the starbucks in maxwell village this morning,only heard one real estate conversation in 45 minutes.also one neighbor who has been on me for a year about the bubble told me he doesn't want to talk about real estate any more...after i sent him the DQ news #'s for sebastopol.third,a cosmetologist/hairdresser across the street is going back to nursing,said that customers are cutting way back on haircuts...said they cite gas prices.as far as the difference between a reduced price and a new price....a "new price" is like,positive man,and like,you know,a reduced price is a bummer.as far as coit's article,i am reminded again that 7% of the populace finds real estate agents trustworthy...especially when 29% trust george bush and between 10 and 15% are seriously mentally disturbed...

 
At 5/26/2006 12:01:00 PM , Blogger Athena said...

well I wonder how many trust the press democrat as a news source for reliable information?

 
At 5/26/2006 12:25:00 PM , Anonymous tom stone said...

athena,i have had the pd's articles quoted to me on several occassions to refute my assertions that this was a massive and dangerous bubble.only one out of many people i offered to provide my sources of data to actually took them.i also know a number of folks who only trust some of the ads in the pd.

 
At 5/26/2006 12:34:00 PM , Blogger Athena said...

I thought a critical thinking class was required to graduate from college. You would think the average joe would have the ability to at least consider the source before swallowing and forking over their wallet to anyone who's talking... Just a basic critical thinking skill that most people should have.

 
At 5/26/2006 12:52:00 PM , Anonymous tom stone said...

should have but don't due to stupidity and/or conditioning.critical thinking is not encouraged in our society/culture to say the least.

 
At 5/26/2006 06:52:00 PM , Blogger marin_explorer said...

"...customers are cutting way back on haircuts...said they cite gas prices"

Tom,
I have to be amused by everyone parroting the "gas price" excuse for today's economic ills. Seriously, how far does one drive to get a haircut?

On a general note, we drove around E.Sonoma today en route to Napa, and noticed a lot of homes for sale, as well as those curiously visible homes at Armstrong Estates. What a strange contrast in Sonoma: nice (but average) tract housing just opposite rather overwrought, neo-Orwellian planned communities, with the attendant, smug types strolling the square. If this were b-movie plot, I could easily imagine an invasion of pod people, spreading their infection on the populace, and realtors spawning from damp storm drains. We like the town, but we'd hardly want to move there and contribute to this monstrous trend...

 
At 5/26/2006 07:29:00 PM , Anonymous tom stone said...

those gated communities are horrific,aren't they,i would much rather live in the mission or parts of oakland where it is alive than one of those communities of the smugly safe living dead...those folks are dangerous to be around.no sense at all.

 

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