The housing market nationwide went through a tremendous surge upward, propagated greatly by the pandemic and changes to our lives. Whether people were leaving the cities for more rural destinations, you also had many people taking advantage of the soaring prices of homes to make the move they had been putting off. No matter what the trajectory is for each individual, one thing is for sure, we have not seen this kind of housing surge in a very long time, in some places soaring well over 20% annually.
Market Cools Off
The surge of home buying that started in June of 2020, has definitely cooled a bit. With home prices being “Covid” exasperated, they have begun to level out a bit over the past 2 months. Even dirt lots that were going quickly from February to May, have subsided a bit, as prices begin to fluctuate as builders are always hedging on what the market will be like 12-18 months from the start of spec home building. The “cooling” off of the market is actually a good thing, as prices adjust accordingly to the market change. But one thing is for sure, Sonoma County has hit a new level of desire among home buyers and investors from all areas.
The Microclimate of Housing in Sonoma County
Sonoma County has always been a desirable location for many homebuyers. It has the best of so many things that people desire. It is also the next destination up from San Francisco that is viewed as affordable and has growth and developments happening. The beauty here is one of the most sought after and with our low levels of supply, Sonoma County is positioned to retain its stealthy values regardless of fluctuations in the market due to one thing, desirability and future growth.
It is the same in other desirable locations like, Newport Beach, Santa Barbara, Los Angeles, Irvine, San Jose and San Francisco to name a few. All these areas have one thing in common. Lifestyle. Santa Rosa now ranks with the likes of these for the same reason. It’s a lifestyle choice. Once these areas establish this platform, it places them in a microclimate where they weather market changes much differently from the majority.
Investors Make Their Moves Here
As values are peaking at their height, investment properties are being sold and via the 1031 Exchange, which still remains, the money is making its way to Sonoma County real estate. Investors who are cashing in on large sums of money are seeking to invest it in areas that are growing, and that is definitely Sonoma County, where they can easily pick up more than one property at this time with their money. These investors are pretty savvy with their investments in real estate. I am receiving more calls for investors looking for property here, which further validates to me that Sonoma County has upped its level.
The Last Quarter
As we head into the last quarter of 2021, I think we will continue to see price fluctuations as we gain more properties coming on the market. There are still a tremendous amount of cash buyers that will make a quick move on a property they want when it hits the market, either being in the “right” location or being priced right. Any adjustments we are seeing in the market is to just get prices back into their proper level, far from the exaggerated prices of the summer of 2020. Even if rates do go up, it could spur on more home buying for those borrowing, especially trying to capture the lower interest rates.
All markets have cycles, and it is my belief we are in a new era in time. Just take a look at the stock market, which has risen over 75% from March of 2020. Cash has been pouring into the stock market. We have a new generation involved in all areas, from housing, stocks, new businesses and the tech industry. With this generation, they bring a whole new level of tenacity, fortitude and vision, thrusting all markets to a brand new level. Perhaps they have learned from the past and are savvy enough to create something new within the markets. Big dreams and big ideas. One thing is for sure, they have a level of fearlessness, not born of ignorance, but of careful thought and the willingness to take a calculated chance.
Even if you doubt that, refer to the Gamestop run. Brilliant.