Bargain Home Prices Continue to Attract Sonoma County Buyers During Third Quarter

First-time buyers and investors continued to take advantage of extremely favorable mortgage interest rates, home prices and a large inventory of bank-owned and short-sale single-family detached homes on the market in the urban areas of Sonoma County during the third quarter of 2008, driving a 46 percent increase in homes sold compared with the same period in 2007, according to a report by the research division of Prudential California Realty based on an analysis of MLS data. Home sales leaped a whopping 89 percent year over year in Santa Rosa, 61 percent in Rohnert Park and 36 percent in Petaluma as homebuyers took advantage of a large inventory of bank-owned homes and short sale offerings in the communities along the Highway 101 corridor. At the same time, sales fell by 35 percent in Healdsburg, 29 percent in Sonoma and by 25 percent in Sebastapol, which faced a drop in inventory. Sales also declined in more rural areas of the county, such as Forestville (-57%) and Guerneville (-23%). Overall, the time a home spent on the market prior to sale decreased by 12 days to 74 days as banks became more adept at moving short sale and REO properties and homeowners not motivated to sell in the current market moved to the sidelines. Homes marketed and sold during the third quarter of 2008 generally found stiff competition from aggressively priced bank-owned homes, resulting in an across-the-board decrease in the median price of homes sold in each of the communities included in the report. Cloverdale (-41%) saw the greatest year-over-year price decline, followed by Sonoma (-37%), Forestville (-36%), Rohnert Park (-34%), Santa Rosa (-33%) and Petaluma (-28%). With many foreclosed single-family detached homes now priced in the $200,000 - $250,000 range in many parts of the county, agents are seeing multiple offers on the majority of newly listed REOs. Observers anticipate the Sonoma County real estate market will continue for the foreseeable future to be dominated by efforts by banks to reduce their foreclosure inventory. That should ensure that first-time buyers and investors who can meet tighter lending standards and make substantive down payments will continue to experience extremely favorable buying conditions in most parts of Sonoma County.