If you're looking for a $400,000 house you should be shopping in the cities in which that price is close to the average. Sure, you're going to find outlier pricing in any city, but it makes sense to focus your search where you are likely to have many choices. The numbers tell another story as well. What might be an average price in one city for an open market sale might be the average range for an REO or a short sale in another city. The tradeoff with a short sale then becomes whether or not you can deal with the very long time frame and uncertainty to get a better deal on an equivalent house. Fortunately, our market now gives buyers a broad spread of housing sales conditions and pricing to let them make an informed choice about where to shop for housing.
*Key - None refers to open market sales by owners that aren't underwater.
This first chart summarizes 2011 pricing for nine cities in Sonoma County. There are lots of nuggets for chart-reading home buyers and sellers to mine from this data. Among the first is to note that not all cities are struggling. Sebastopol, Sonoma, and Healdsburg all show a premium for open market sales that is also reflected in the valuation of their REO and short sales. In those three Sonoma County cities, the average price for an REO or a short sale is still near the $400,000 mark. If you're looking for a $300,000 bargain home, this chart shows tht you're better off looking in Rohnert Park or Santa Rosa.
Based on the higher average sales values, I wanted to get a sense for the pricing fluctuation among the three high performing cities I cited earlier. Sonoma, Sebastopol, and Healdsburg are all small towns surrounded by both small country properties and larger estates and commercial farming operations. They have been market leaders in pricing for many years and I was curious whether the housing bubble had treated them all equivalently.
There are a few spikes in the data that even a three month rolling average wouldn't smooth out. (My office mate, Kathy Stauffer had a few high value sales that spiked the Healdsburg pricing in early 2009. Good for her, but bad for a smooth chart.) What you can see from this chart is that all three cities had average prices in the $800,000 price range in the middle of 2006 and continuing at that level. By the summer of 2008 the housing bubble had collapsed and prices dropped about 25% to the average $600,00 price range by the early summer of 2009. Although the prices have bounced around since then, we're still in that same general average $600,000 range in those cities.
I go into more detail about Rohnert Park REO sales on my reo.sonoma.net site.
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