Cloverdale is a classic small town at the northern end of Sonoma County. The Alexander Valley appellation, a famed wine country designation, begins in Cloverdale. The housing boom was unkind here. Multiple developers projected strong growth for residential housing in Cloverdale and a multitude of projects were started in the early part of the 21st century. Many, like the Del Webb senior housing community, were finished long before the housing bubble collapsed. Others, including "The Brambles", a lovely development by Christopherson Homes, were finished just in time for the first buyers to get into their homes right at the peak of the market. Ouch! Most of the original buyers are licking their wounds elsewhere as their dream homes were foreclosed on or sold as short sales. Both the bigger homes and more modest neighborhoods were hard hit.
Signs of the recovery are evident if you can glean data nuggets from charts that have too few data points to be completely meaningful...and if you know how to read the MLS data on active, contingent, pending, and sold properties.
This Cloverdale Unit Sales by Sales Condition chart shows the strong presence of REO transactions in the market. The dark brown bar represents well over half the sales in January, February, and March. Cloverdale REO sales are still strong in April, but during the summer months, there was in increase in short sales as a proportion of the market. The big change comes in August when normal, unstressed sales make up more than half the market. In addition, the volume of sales hit 24 units in August when the previous highest figure for this year was 17 home in March. It's not clear if this burst represents pent up buying, but there are some signs from the MLS that residential sales activity has continued to be strong in September.
There are currently 83 listings for single family homes in Cloverdale. 30 of those homes are either in escrow or have closed this month. At that rate, there are less than three months of supply, a condition that most observers would call a seller's market. In the most desirable neighborhoods like the Brambles, homes priced well are selling even faster. It's too small a sample to be statistically important, but in the Brambles one listing just sold, three are contingent, and one is active.
A few things are clear. As a seller, you still have to be aggressively priced to get offers. The presence of high quality, newer homes at bargain prices puts a lot of pressure on sellers who want to get top dollar for their smaller, older homes.
Eager buyers are present in the market. They are attuned to current values and will snap up properties at the prevailing selling prices, particularly the deluxe models that are selling at a bigger discount from their original price. Many buyers are grabbing second homes. Investors are picking up single family homes that will generate positive cash flow. First time buyers are able to move into nice condos for far less than the cost of renting would be.
I was brave once, and called the bottom of the market in April of 2009 here on ActiveRain. I was lucky and we have been bumping along on a plateau ever since then. What I'm seeing in Cloverdale is the emergence of buying pressure from people who think now is a great time to get back into the market. Prices will always fluctuate, but home prices have been squeezed until all the fat has been wrung out of them. I see Cloverdale today as an excellent buying opportunity for both investors and people looking for a nice town to live or vacation in.
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