July 2024

July 8, 2024

Someday, perhaps, the history of the 2020 Global Pandemic could encapsulate an entire decade – to 2030, and appropriately start by featuring the health crisis and widespread fear that the human race faced on every continent. Then the pages will shift to the more enduring consequences on people’s lives economically. Among other things, the pandemic spurred hyperactive government spending (not just in the U.S.) which later turned into significantly higher inflation. That, subsequently, increased housing costs (of all kinds), and for a few muddling years, placed residential real estate into a benign form of purgatory, and noteworthy for its limited trading activity. If this theory holds, we are talking about late 2023-to-early 2027, the literal “Middle Ages” of this so-called Pandemic Decade. And then optimistically, only to emerge – in 2030, more or less unscathed and back to ‘normal.’

This is the delusional part of this theory: there never is a normal. Rather, there are cycles, variations on previous conditions. For example, in some ways the current market we are experiencing reminds many real estate veterans of 2009-2012, but not because of a Great Financial Crisis in the preceding years, but rather because of the aforementioned hyperinflation in the latest go around. Similarly, the jacked-up sales cycle, albeit brief, immediately following the onset of the pandemic reminds these same real estate Pros of the early 2000s. Remember, the ‘fog-a-mirror-get-a-giant, non-recourse loan-and-buy-a-house’ era? That was as crazy as 25% to 40% price increases in the second half of 2020 until early 2022, when the Fed started increasing rates considerably.

The latest sobering news, which led us to think of this Pandemic Decade theory and the Middle Ages, is from Bank of America. One of its economists, Michael Gapen, recently told CNN that “the U.S. housing market is stuck and we are not convinced it will become unstuck until 2026, or later.” Mr. Gapen continued: “This will take many years to work itself out. There isn’t a magic fix.”

Everyone remotely paying attention has heard that a big reason for the reduced levels of transaction activity is because so many people refinanced their homes when rates were around 3%, and these folks are not selling. The situation is compounded, however, by the ongoing push in home prices. The National Association of Realtors just reported that national median existing-home price in May reached $419,300, a record going back to 2019. The Bay Area’s median home price, by comparison, was $1.3 million in the same month while California’s was $836,110. Meanwhile, The Wall Street Journal ran a story June 28 with the headline: “Overvalued Houses are a Warning Sign,” and noted that prices jumped 1.2% in April from March and are now almost 50% higher than in 2019. We can’t say that prices increased that much in Sonoma County in the last five years, but it’s not far off.

All this isn’t to say that the housing market is frozen. It’s not. For example, BAREIS reported in May that 431 Sonoma County homes sold, or 5% fewer than the same month a year earlier. Sonoma County Properties was involved in one of those sales, which is a short story unto itself (another time), and with a pretty good outcome for the seller, as we closed for nearly $400,000 above the asking price.

The pace of sales may be off for the time being and that probably isn’t going to change anytime soon, yet the four primary drivers in the housing market are and will continue to be present, particularly with the rise of Gen Z. They are the primary group in the first driver, household formation/starting a family, while immigration, divorce and death are the other constants associated with an active housing market.

Categories: Market News

Tags: Sonoma Properties

August 2024

June 2024

“

Ron represented me twice in recent years on the listing and sale of two investment properties. His vast knowledge and experience in real estate made for trouble free and expedient transactions. Ron’s communication and negotiation skills are top notch. Highlighting Ron’s genial personality, it was a pleasure to have him represent me.

”

— Glenn S.

“

Ron was a tremendous help during an extremely difficult transition for me after living in my house for 36 years. He went far beyond what I expected in a RE Broker by helping to enhance the appeal of my house and by guiding me through all the challenges that came up from selling a rural property. And he’s just a genuinely nice guy! His calm attentiveness and deep knowledge made the move bearable when I felt like giving up just from exhaustion. On top of that, he helped me acquire my current house which is so perfect for me during this new chapter of my life. A very happy ending!

”

— Sharon B.

“

Ron Welsh, the owner/broker of Sonoma County Properties Inc., has been nothing less than an angel in disguise when it came to the sale of my grandmothers property.

When my grandmother died at the age of 103, she left her only asset of a country property in Santa Rosa to her four children in equal shares. These are four senior citizen adults that did not typically see eye to eye. Ron was patient, understanding, unflappable, and made the process extremely easy. His experience in real estate transactions was evident and his experience in dealing with multiple obstreperous parties was clearly unmatched.

Ron kept the family apprised of every step in the process and was successful in selling my grandmothers (rather dilapidated) home in just a few days to the satisfaction of all parties. That was no easy feat.

I would highly recommend Ron and his team in any real estate transaction, whether that be buying or selling a home.

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— Kathleen Pozzi

“

I found Ron to be the consummate professional. He is extremely skilled and accomplished at all phases of the sales process. His hard work and negotiating skills were the deciding factor in closing the sale of our home in less than 90 days at 97% of our asking price. That is a real accomplishment, as our home was priced at the upper end of the market where buyers were far and few between.

I would highly recommend Ron’s services for anybody looking to purchase or sell a home in this area.

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— mwerneralsco

“

We were looking for a unique house with character. Ron took the time to understand our needs and was patient with us as we spent many months looking for the right house. He was always available to answer questions or tour properties, and didn’t push us to commit to something that wasn’t right. Ron was a calm, reassuring presence during our search. He knows both the real estate business and the local market. Ron is an experienced advocate you’ll be glad to have in your corner. He is the Realtor we would recommend to friends and family.

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— MF Warren

“

We were able to hit our target date for listing and Ron had us priced right to get multiple offers within 48 hours. From that we were able to choose a strong buyer and close in under 3 weeks, still in October. What had seemed an impossible dream became our new reality thanks to Ron’s experience and ability to get us connected to the right people and complete our pre-sale tasks. Aside from all this Ron is simply a great person to know and work with. He is hands on (literally helping me tear down a false wall the tenants had erected) and was constantly extending offers to help in any way he can with the contractor and appliance deliveries. I strongly recommend Ron to anyone looking for a top quality real estate experience.

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— Kevin E.

“

Ron has helped our family members buy two homes and sell another. I’ve also recommended him to several friends over the years – something I only do when I really trust someone to take good care of them. Everyone has really enjoyed working with him and they’ve become repeat customers of his now too. He knows Sonoma County so well and has a great mellow personality. except when you need him to really rally for you during price negotiations – the perfect combo you want in a realtor!

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— Kelley K.

“

Ron negotiated our very challenging deal with multiple transacations and deadlines. This was definately the kind of situation the required experience. He went the extra mile to ensure that both our real estate sale and purchase closed on time. This was such a tricky process, I really don’t think it would have happened without Ron there to help us through!

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— Nick S.

“

Ron Welsh, has been our real estate the past few months, He has conducted himself, very professional, has been very sincere in our needs of real estate. Dealing with past agents some were not very reliable, Ron was always on time with appointments. It has been a pleasure working with him.

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— David & Linda R.

“

I’ve had 2 purchase and one sell experiences in my life so far; hands down Ron Welsh / Sonoma County Properties was best real estate experience I’ve had to date.

In the end, I felt like Ron was really on my side, advocating my position at every step. Thanks to him, our project is well on its way and we should have our new home for the next holidays.

”