Year-over-Year Q3 Comparisons – Q3 2016 – Q3 2019
Median House Sales Prices by QuarterAfter significant drops in median sales prices beginning in summer 2018 (following a very strong spring 2018 selling season), prices bounced back up: In Q3, the Sonoma County median house price was up a little on a year-over-year basis, after 3 quarters of year-over-year declines (as illustrated in the 2nd chart below).
Home Sales by Price Segment & Bedroom CountThe variety of homes sold in Sonoma County is astounding, but by far the most common sale is of a 3-bedroom house at a price between $500,000 and $750,000.
New Census EstimatesUnderlying the real estate market are the changing details and circumstances of its population. At the end of September, the U.S. Census released its 2018 American Community Survey 1-year data estimates for a broad range of economic, social and demographic statistics. Below is a selection of survey insights into our community, plus 2 or 3 statistics from other sources. (You may want to expand this slide for easier reading.)
Higher-Price Home Sales by QuarterSelected Market Indicators The next chart measures buyer demand against the supply of active listings on the market, and the softening in the market that occurred in Q3 2018 is clearly illustrated. Sales volume in Q3 2019 was up over Q3 2018, but still well below sales numbers seen in the third quarter of the 3 previous years. Market activity usually begins to drop in the fourth quarter (and plunge after mid-November), but sales occur in every month of the year. Indeed, slower periods can be advantageous to buyers since competition for listings plunges. Note that the low point in sales in Q1 mostly reflects the slowdown in market activity in the last half of Q4. On a percentage of listings basis, the percentage of active listings reducing price was a bit lower in August 2019 – the latest data available – than in August 2018, but well above previous years. This percentage typically peaks in September or October as sellers of unsold listings try to recapture the attention of buyers before the big mid-winter holiday slowdown takes hold.
Employment TrendsUnsurprisingly, a major dynamic affecting home price appreciation or depreciation is the ups and downs in county employment numbers. Though Sonoma has had a very strong recovery in employment numbers since the market recession of 2009-2011, it has not experienced the stupendous new highs in (generally, very well paid) jobs seen in counties most affected by the high-tech boom – which have pressurized their markets more intensely.
Mortgage Interest RatesA year ago, many experts predicted that interest rates in 2019 would average in the 5.5% range, but they plummeted instead, a major dynamic in this year’s market. Buyers generally saw big drops in homeownership costs as compared to 2018. Historically, it has been very difficult to predict interest rate movements.