Sonoma County Affordability is the Worst
Home prices fell more sharply in Sonoma County last month than anywhere else in the Bay Area, except Solano County, according to a report issued Thursday.
Steve Cochrane, an analyst with Moody's Economy.com who tracks Sonoma County's economy, said he wasn't surprised by Sonoma County's drop.
"I've always felt the Sonoma County housing market was at fairly considerable risk," he said.
"It seems like Sonoma County is one of the weakest economies in the Bay Area. There's hardly any job growth to speak of. That's essentially the basic building block of the economy," Cochrane said.
YAWN! we've been reporting on the state of the economy for the past 8 months. This should not come as a surprise to anyone. Plus who cares about the reporting on this... if you live here you KNOW this because you live it every day.
A weak economy, combined with home prices that remain out of reach for many residents, continues to dampen buyer demand in the county, Cochrane said.
The county has lost 3,100 jobs over the past year, putting the brakes on what had been a sluggish economic recovery from a recession that was longer and deeper than expected.
Sonoma, Solano and Contra Costa counties, which are the farthest from the core of Bay Area jobs and have the region's least-expensive homes, suffered the largest rate of decline in November, according to Data-Quick Information Systems, a real estate research firm.
In Sonoma County, prices have dropped 7.7 percent to a median of $530,000, while sales have declined 22.5 percent, according to DataQuick.
An expanding labor market is critical to housing's health because that draws workers and can boost incomes.
Another disadvantage for Sonoma County is being on the edge of the Bay Area and far from major job centers. That limits the number of commuters willing to move here and first-time homebuyers drawn to where jobs are forming, Cochrane said.
"Income growth has been sluggish as well, so we haven't really seen enough of an improvement along with lower housing prices," he said. "The affordability of housing in Sonoma County is probably the worst in the Bay Area."
Even if prices level off next year, the county's housing market could remain weak through the middle of 2008, according to the latest forecast by Economy.com. The correction in home prices will be deeper in Sonoma County compared with the Bay Area as a whole, Cochrane predicted.
"It may be until the middle of next year until things settle down," he said.