Sonoma County Outlook 2007
A SHB reader sent in this most enlightening graph regarding housing affordability here in Sonoma County.
Reader quote:"Wow! Doctors cannot even qualify for a conventional mortgage to buy a home in Sonoma County at the Medium price point! Doctors! Stunning!"
Also sent in was an Economic Development Report on Sonoma County Economic Indicators for 2007. (pdf warning)Interesting quotes from the report below:
"Sonoma County faces several challenges. The median price of a home is still unaffordable for more than half of Sonoma County families."
"Job growth has also slowed and high energy costs have contributed to a cost of doing business that is 10 percent higher than the U.S. average."
"And new issues will continue to emerge in the future. For example, Sonoma County will soon face the challenge of managing a limited supply of water for an increasing population and the reality of exporting waste."
"In December 2005, only seven percent of households in Sonoma County could afford the median-priced home."
"Moody’s Economy.com also estimates that the median income-earning household could only afford to buy a house priced at 46% of the median sales price in the second quarter of 2006."
"According to the Housing Affordability Index, which compares county-specific data on income to home prices, Sonoma County is the second least affordable county in the state, trailing only Santa Barbara."
"The minimum family income needed to purchase a medianpriced home in Sonoma County is $133,311, based on an average effective mortgage interest rate of 6.33 percent and assuming a 20 percent downpayment.
"The approximate median family income in Sonoma County in 2005 was $58,330."
Why is it Important?
"A lack of affordable housing can be a barrier to a strong, reliable economy. High relative housing prices may influence location decisions of businesses. A shortage of affordable housing (particularly for first-time buyers) may discourage young families from moving to Sonoma County or staying here after graduating from local colleges and universities. Sonoma County workers settling outside the county can result in longer commutes, increased traffic congestion and pollution, decreased productivity, and diminished quality of life."
"Sonoma County ranked fourth among the comparison regions for 2005. Sonoma County fared well in all categories except job growth. More recent data, at the time of this writing, suggests that job growth has continued to slow through 2006 as well."
"It should be noted that the comparison counties are among the wealthiest in California and that income inequality and increasing economic pressure on low- and middle-income families still remain issues confronting Sonoma County."
"One of the major challenges facing Sonoma County’s economy, the data suggests, is job growth. Over the course of the year, Sonoma County only experienced a 0.4% increase in total jobs, while Napa and Santa Barbara both posted 3.3% increases."
"Forbes magazine’s “Best Places for Business” ranking evaluates selected regions with stronger business climates across the country with a variety of characteristics the magazine believes are most important to business success. The Forbes ranking for Sonoma County has usually been high, peaking at second in the nation in 2002."
"However, recently the ranking has fallen dramatically to 182 out of 200 in the nation. This descent is most likely due to a combination of the rapidly increasing cost of living, a slowing economy in comparison to the late 1990s."
"The poverty rate in Sonoma County can be somewhat deceptive, however, as the official poverty calculation does not include an adjustment for varying costs of living between regions. Thus, a family earning a given income in Sonoma County is assumed to be as well off as a family earning that income anywhere else in the United States, despite the fact that the costs of living are well above average in Sonoma County. Therefore, the “real” poverty rate is likely significantly higher than official statistics indicate."
"The two largest sectors in Sonoma County are manufacturing and retail trade, which each employing just under 13% of the County workforce. Manufacturing, which includes wine and food production, is the county’s single largest sector."
"From 1995 - 2005, the Construction sector added 6,700 jobs, increasing 88% in size. The recent downturn in the real estate market, however, has diminished some of these payroll gains."
"The professional and business services sector grew 44%, and leisure and hospitality grew 33%. Some relatively high wage sectors, such as manufacturing, have been declining for nearly five years."
"Continuing population growth has yet to be matched by an increase in the capacity of the transportation system, although an expansion project for Highway 101 has begun. Consequently, Sonoma County freeways experience greater levels of utilization and residents have longer commutes than comparable counties."
"In fact, the average Sonoma County commute is 25% longer than the average Santa Barbara commute, and Sonoma County freeways carry nearly 50% more cars per lane-mile than San Luis Obispo freeways."
"From 1998 to 2003, the population of Sonoma County increased 6%, adding 27,000 new residents. Yet the county freeways added fewer than four lane-miles of roadway, an
increase of less than one percent."
"In 2004, Sonoma County consumed 98,474 acre-feet of water. This usage is a 5.6% increase over 2003, and more than an 11% increase over 1996 water use of 88,155 acrefeet. More than 38% of the County’s water supply comes from sources other than the Russian River."