The communities of Forestville, Guerneville (including Rio Nido), Cazadero, and Monte Rio are collectively referred to as the "Russian River" area in our local MLS. There are differences among the towns, but they share the river, magnificent redwoods, and a big base of summer cabins that have been converted to year round use. The housing stock ranges from cabins living unchanged under the redwoods for fifty years to wonderfully updated homes with private beaches or small vineyards.
Economically, the river areas feature Sonoma County's least expensive homes, lowest rents, and an abundance of foreclosed properties. The downturn in the economy hit this resort area hard with many tourism related jobs vanishing. Still, it's affordable and reasonably close to Santa Rosa. The river areas serves as a bedroom community for the capital of the county which has a better job market and the Santa Rosa JC is a magnet for people who stopped their education too soon.
The first chart show the impact of the downturn in housing values on the river. In contrast to areas like Healdsburg and Sonoma that have only a few REO properties, the river area is swimming in distress with both short sales and REO listings as a significant part of the market. In Guerneville, REO sales are a plurality of transactions. Monte Rio and Forestville fare a little better with open market sales as a plurality of transactions. Only tiny Cazadero, one of the wettest spots in the continental United States showing a strong core of open market sales and just a few distressed sales.
The picture is strikingly different when we chart average sales values for the various sales types. In this chart, Forestville shows no sign of distress in their open market sales. In fact, the values for home sales in Forestville appear to be as high or higher than much more affluent areas of Sonoma County. I would think this would be a result of one or two high end sales, but the first chart shows 20 sales, so it's not a fluke from one sale. Forestville is more than holding its own on the open market sales front.
When you get to distresses sales, however, Forestville is in the same boat with Guerneville and Monte Rio. REO sales in all three cities are selling for substantially less than open market and short sales.
There are some distressed housing bargains in the Russian River. Smart buyers in 2011 have obviously been willing to pay significant prices to get into the Forestville residential market.
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