Broker Blog

Welcome to Scott Rader as a Partner in the Wine Country Group: We issued a Press Release this week welcoming long term North Bay real estate broker Scott Rader as a partner in the Wine Country Group. Scott has worked with our firm over the past twelve years and was responsible for expanding the Healdsburg office and establishing offices in Windsor and Cloverdale. Scott will be a great resource for the firm and it's agents. If you would like a copy of the Press Release, just let me know.

Seven New Rules for First Time Home Buyers: A recent article by Ron Lieber in the New York Times suggests seven new rules for first time home buyers. Of course, if you have been in the business for a while, you will recognize some of these rules as old rules before the lenders got goofy - in any case they are the rules of the day:
1. Start with the basics: A minimum of 20% down payment; a fixed rate loan; don't spend more than 35% of your pretax income on mortgage, property tax and property insurance payments. With student and other loans included, do not exceed 45% of your pretax income.
2. Consider your income: The best case for "stretching" for a house is that first time buyers in their 20s and 30s income will grow more quickly than older people buying their second or third home.
3. Bow to Unknowns: There are many reasons that a young couple, with both individuals working at present, may find that they need to live on one income, or on one full time and one part time income. It is wise to do financial modelling for these circumstances.
4. Map out expenses: Studies show that many homeowners underestimate the cost of maintaining a home. One source recommends budgeting 3.6% of the original purchase price of a home per year for maintainance and 4.5% of the original purchase price per year for an older home.
5. Buy Best (or Cheapest): Some suggest buying your "dream home" if you can afford it - but if you can't, don't buy the "next best thing", buy a less expensive starter home that will allow you to save towards that dream home later on.
6. Stretch the House: This refers to stretching your time in a home and making continual "expansion improvements" to the first home rather than incurring all of the transactional costs of buying a series of homes.
7. The Eight Hour Rule: All of the above rules vary from circumstance to circumstance. The old fall back "eight hour rule" says that if the impending purchase and future ownership expenses are keeping you up at night - maybe the purchase should be postponed until you are more comfortable with the decision.

Wine Country Group Summary for August, 2009

We closed 70 transaction sides in August, more than in any August since 2005 when we closed 75. This is 15% more than we closed in August, 2008 (61). But, as has been the case most of the year, the dollar volume was 15% below the volume last year. On the positive side looking ahead, the average asking price ($900,000) of our 250 listings at the end of August remained 32% higher than this time a year ago – so higher selling prices are on the horizon. Our Sonoma and Healdsburg offices had particularly strong results in August.

We continue to receive multiple offers on our REO listings as the demand is strong and the supply has weakened. We are still expecting a second wave of foreclosure properties as our Bank of America partner is expecting their nationwide inventory of REOs on the market to jump from 30,000 to 70,000 in the next six to twelve months.

We remain solidly number one in market share in our Sonoma Valley, Healdsburg and Cloverdale markets. In the past twelve months, we closed 2.4 times the number of transactions as our nearest competitors in our Sonoma office. Our Healdsburg office has increased it’s market share for the first eight months of the year to 25.4% from 18.1% for the first eight months of 2008. Our Napa office has generated a 41% increase in transaction sides (178) for the first eight months of 2009 compared to 2008. The firm just ahead of us in market share in Napa only increased their business by 16% in comparison, so we are continuing to grow our Napa Valley business at a healthy pace. We respect the hard work that all of our agents are doing in these tough times to help us to remain market leaders.

(Late update: We've opened at least 16 escrows in the past two days. Either the agents have been holding out putting them "on the board", or it's gotten a bit hot!)

August, 2009 - Market Analysis

Napa County Trends: The inventory of homes and condominiums for sale at the end of August in Napa County (613) was 31% below the inventory (884) at this time last year and represents the tenth month in a row that inventory has fallen month over month. New sales (174) were a whopping 75% ahead of the pace a year ago. The average price per square foot of the homes closed in August reached $266.00, a steady increase since February when the per square foot price was $201.00. The county in general is down to 3.5 months supply of inventory based on the current sales pace. American Canyon has just one months supply of inventory and the town of Napa has 3.4 months – so it is Up Valley Napa County that has an overhang of inventory. One third of the available inventory in the county is located “Up Valley” at the end of August. Please contact me for additional information and copies of the complete TrendGraphix reports.

St. Helena/Up Valley Trends: The St. Helena/Up Valley market (Angwin, Calistoga, Deer Park, Rutherford, St. Helena and Yountville), though heavy in inventory with 203 units, did experience and up tick in sales in August to 17. This is the highest number of new sales in any month in Up Valley since April of 2007 when there were 20 sales. Perhaps the market is starting to finally warm up. Unlike our other Wine Country markets, inventory is up 12 % from a year ago, but it has decreased over the past three months. Up Valley available listings represent 33% percent of the overall Napa County inventory – a very unusual occurrence. Please contact me for additional information and copies of the complete TrendGrahix reports.

Sonoma County Trends: The inventory of homes and condominiums for sale (1,438) in Sonoma County at the end of August was 44% lower than a year ago. New sales (648) in August were 40% ahead of the pace in August, 2008 and 13% ahead of last month. The median price of homes closed in August in Sonoma County was $325,000, slightly off from a month ago, but a solid 14% ahead of the low median price point of $285,000 that was reached in February. Based on the current sales pace, there is only a 2.2 month supply of inventory, either an indication of a pending sellers market, or, more likely, a slowing of the sales pace. Please contact me for additional information and copies of the complete TrendGraphix reports.

Sonoma Valley Trends: The inventory of homes and condominiums for sale (190) in the Sonoma Valley (Sonoma, Glen Ellen and Kenwood) at the end of August was 21% below that for August, 2008 and 11% lower than the inventory of last month. There were 45 new sales for the month (compared to 38 a month ago and 30 in August, ‘08). The median sales price in Sonoma Valley in August dropped to $370,000 from $504,000 last month, so there were fewer sales in the high end and perhaps more condominium closings. Please contact me for additional information and copies of the complete TrendGraphix reports.

Healdsburg Trends: New sales (21) in August remained at a relatively high level. They were 91% ahead of the new sales pace a year ago. The inventory of homes and condominiums for sale (109) in Healdsburg at the end of August was slightly higher than that of last month (104) but was 13% below the available inventory (125) in August, ‘08. This market is certainly showing signs of rebounding. The average days on market for the 20 closed sales in Healdsburg last month was 91 days which is a more rapid turnover than most of the past year. Please contact me for additional information and copies of the complete TrendGraphix reports.

Cloverdale Trends: Sales in Cloverdale for the month of August remained strong at 24. This is the highest sales pace for a single months since February of 2005 when there were also 24 sales. The inventory of homes for sale in Cloverdale (37) at the end of August, 2009 is slightly ahead of last month and creates a supply of only 1.5 months of homes based on the current sales pace. The median price of the homes sold in Cloverdale in the month of August was $346,000, the highest level since August of 2008 when it was $394,000. Please contact me for additional information and copies of the complete TrendGraphix reports.

Windsor Trends: The inventory of homes for sale in Windsor (58) at the end of August is 58% lower than it was a year ago. And, with a sales pace of 37 new sales for the month, the market is at a low of 1.6 months of inventory. The sales price to original listing price remains a healthy 99%. and prices have stabilized at slightly over $200 per square foot. It is interesting that there were new sales of 35 units, 33 units and 38 units in May, June and July of this year, but there were closings of only 29 units, 29 units and 16 units in June, July and August. So, we are either having delays in financing – which seems pretty prevalent at this time – or we are having a lot of cancellations in this market. Please contact me for additional information and copies of the complete TrendGraphix reports.

Legal Update: Mark the dates: Tuesday, 10/20, 8:30 am in Rohnert Park or Tuesday, 11/3, 8:30 am in San Rafael. Risk management requires all of our attendance at one of these presentations.

Closings: First of all, congratulations to Jane Barker of our Napa office for closing her first ever escrow (only happens once!) on September 1. Wishing her many, many more. Other closings for the period 8/24 to 9/11 include: Erin George, Sonoma; Kent Mitchell, Healdsburg; Diane Krause, Sonoma; Dan Gallagher, Sonoma; Lark Raymond, Napa; Carol Lexa, Healdsburg; Joyce Davison, Sonoma; Diane Litchfield, Sonoma; Leo Merle, Sonoma; Herb Heil, Sonoma; Constance Sharpe, Glen Ellen; Robyn Makurak, Sonoma; Ann Amtower, Healdsburg; Cheri Stanley, Napa; Hank Lane, Healdsburg; Pam Giusto, Sonoma; Monica Hernandez, Healdsburg.

The following agents had two sales during this period: Faeli Vyn, Napa (and her son got married); Pat and Norm Brown, Sonoma; and Sally Kros of Kelseyville, Lake County.

Daniel Casabonne, Sonoma; David Barker, Napa and the Foss Creek team of Lisa Albertson, Susan Montgomery and Gina Clyde each had three closings during this period - and Lisa had one extra on her own!

Finally, Doug Del Fava and Susan Parker had four closings during this period.

Congratulations to all!