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June 13, 2017

Strong Spring Markets In Sonoma County & Around The Bay Area

The chart below compares median house sales prices since 2012 for March through May sales, year-over-year, for Sonoma, Marin and San Francisco Counties: Sonoma prices are illustrated by the blue columns. Many Bay Area Counties hit new peaks in median sales prices this spring, while Sonoma, which started its recovery a bit later than counties closer to the high-tech boom, is just a tad below its previous peak in 2006. This is illustrated in the longer-term annual chart below.

Year-over-Year 3-Month Median Sales Prices
March-May, since 2012: Sonoma, Marin & San Francisco


Sonoma Home Values by City & Town

Sonoma Sales Volumes & Seasonality


The market ebbs and flows dramatically with the seasons. The most active months for closed sales in Sonoma typically run May through August, with activity declining in autumn and then plunging during the mid-winter holidays. Remember that sales negotiated in one month (which reflect buyer demand) typically close sale in the following month (or two). Thus the extremely slow December – January market is reflected in very low January – February sales volumes.

In most Bay Area counties, sales peak in spring and autumn, and drop during the summer holidays. But in Sonoma with its second-home market and busy summer tourist season, the months in the middle of the year dominate the year.

Comparing National and Bay Area Trends

Home Price Appreciation since 1987
through March 2017

The numbers on the Case-Shiller chart below all relate to a home price of 100 in January 2000: 50 denotes a home price 50% below then; 230 signifies a price 130% above January 2000.


This chart compares the S&P Case-Shiller Home Price Indices for the 5-county San Francisco Metro Area market in the blue line and the United States market in the green line. It goes through March 2017, the last report Case-Shiller has released as of early June, so it will not reflect any April-May appreciation. Sonoma is not actually in the C-S SF metro area, but its trend lines are quite similar, except that its recovery through 2017 is not yet quite as high in comparison to the 2006 peak.

The national and Bay Area appreciation trend lines are similar except for 3 periods: Right after the 1989 earthquake, the rise and fall of the dotcom bubble, and the recent high-tech boom in the Bay Area.

Sonoma County Luxury Home Market

The number of Sonoma homes priced at $1 million-plus accepting offers (red line) hit their highest points in years, if not ever, in April and May, while the number of active listings (blue columns) hit a high point in May.

Luxury Home Sales by City & Town
12 Months Sales Reported to MLS

Months Supply of Inventory (MSI)
Homes Above & Below $1 Million


The MSI for homes selling for under $1m has been bumping along at near historic lows this spring, an indication of fierce demand amid low inventory. More expensive homes have a higher MSI figure, which is not unusual, but their MSI too has been quite low by the standards of the market segment.

Market Statistics
Comparing Listings Selling With & Without Price Reductions
Sales Price to Original List Price (SP-OP) Percentage

In April and May of 2017, listings that sold without going through price reductions (blue columns), i.e. homes the market deemed appealing and well-priced, averaged a sales price just above asking price, signifying strong demand. Those listings that had to go through one or more price reductions before selling (green line) averaged a sales price 5 to 8% below original asking price.

Average Days on Market (DOM)

In April and May of 2017, listings that sold without going through price reductions (blue line) had an average days-on-market of 35 to 36 days, the lowest in years, while those listings that had to go through one or more price reductions before selling (green columns) averaged a days-on-market of 87 to 115 days.


The two charts above illustrate the positive effects of preparing, pricing and marketing a home properly (especially pricing correctly), and the negative effects of not doing so. Not illustrated is the fact that even amid a strong spring market, 160 Sonoma home listings expired without sale, typically because sellers were asking for more money than buyers were willing to pay.

Mortgage Interest Rates

As of June 12, mortgage interest rates have continued their decline from the first of the year. Interest rates remaining so low by historical standards, and the fear that they may soon go up, is probably one of the factors behind the very hot markets seen around the Bay Area and the country this spring.


All our Bay Area real estate reports can be found here: Paragon Market Reports

Please call or email if you have any questions, or would like further details on recent sales or homes currently on the market.

It is impossible to know how median and average value statistics apply to any particular home without a specific, tailored, comparative market analysis. In real estate, the devil is always in the details.

These analyses were made in good faith with data from sources deemed reliable, but may contain errors and are subject to revision. It is not our intent to convince you of a particular position, but to attempt to provide straightforward data and analysis, so you can make your own informed decisions. Median and average statistics are enormous generalities: There are hundreds of different markets in San Francisco and the Bay Area, each with its own unique dynamics. Median prices and average dollar per square foot values can be and often are affected by other factors besides changes in fair market value. Longer term trends are much more meaningful than short-term.

© 2017 Paragon Real Estate Group