North Bay home sales take dive in spring, but Bay Area shoppers fuel local demand

Home sales in the North Bay slammed shut in May and most of June, but real estate agents and economists feel a rebound may come by mid-summer as dot-comers opt for more space in Wine Country.

The number of houses sold in Sonoma and Napa counties dropped by about half in May from a year before, according to MLS statistics furnished by Compass realty. Sales in Sonoma County fell to 251 from 514. In Napa County, 76 sold in the same month in contrast to 134 last year.

Marin County didn’t fare much better. Buyers snatched up 333 homes in May 2019, but numbers plummeted last month to 158.

Within the first three weeks, June saw little significant improvement to the North Bay housing market from year to year.

Sonoma County has experienced about a 20% drop in homes sold, to 309 so far this month from 373 the previous June. Napa County is still down, 66 this month from 110 a year before. Marin County home sales have dropped, to 156 this month from 206 last June.

“This is absolutely COVID(-19) shutdown related,” said Carol Lexa, North Bay Association of Realtors president and a Compass broker. Lexa admitted she was not stunned by the outcome.

“We were under a shelter-in-place, with seemingly limited abilities,” she said.

First, agents were unable to show property under the state and local orders for residents to stay at home from mid-March into April.

“We were doing no work,” she said. “Virtual tours are not the same thing. People like to visualize the house. They have to see themselves there.”

Then, agents were allowed to show vacant properties. By mid-April, government mandates loosened to let them bring prospective buyers into occupied homes.

“This drives home the point that the virus-spawned shelter in place had a major impact on the real estate market,” she said.

All that gloom and doom could change with a quick turn of a key in the coming months, as optimism is spreading fast in the North Bay market, according to housing market stakeholders.

Location, location, location

Prospective buyers are starting to show their faces — and a steady continuation of prices reflects that trend.

“I think, to some degree, a number of factors are part of what Sonoma is seeing this year as people now are able to work from home and want to buy up here. We’re getting a broad spectrum of buyers now looking,” Lexa said from her Healdsburg office.

Indeed, the median price for homes sold in Sonoma County this May was $640,000 — the exact figure from last year at this time and $2,000 more compared to April, according to MLS data compiled by Compass. The high point since March 2019 came last August, when the median climbed to $670,000. This summer’s banner month may be quite telling to the North Bay housing market’s weathering the global pandemic.

Marin County’s median price jumped to $1.2 million in May, up from April’s $1.13 million but falling slightly short of the previous May’s $1.23 million.

Napa County saw a little leveling in its median this past May to $618,000, dropping $82,000 from the previous month and $92,000 from the prior year.

Overall, the market median pricing has remained steady with little fluctuation from month to month in the last year or so in the North Bay.

And despite the dip, some real estate agents said they are seeing a silver lining as new buyers pour into the Wine Country market with inquiries.

“Our market is on fire now. We’re writing offers on our cars — like 2000,” Napa agent Jill Levy said, citing “pent-up demand” as a contributing factor to a recent surge in business.

“If you were to have asked me if a COVID pandemic or civil unrest would affect the Napa real estate market, I would have said you were out of your mind,” she said.

Levy insisted the Napa region represents a safe, stable place to call home.

“I got a call from someone asking me if Napa had riots,” she said.

Moreover, the shelter-in-place orders spurred by the highly contagious disease has reinforced many companies’ notions that much of their workforces can stay home for good.

According to a Global Workplace Analytics survey, 88% of workers polled are doing so at home. About three-quarters of those workers like the situation.

Levy estimated that 95% of the North Bay housing demand is perpetuated by shoppers from other San Francisco Bay Area counties such as Alameda, San Mateo, San Francisco and Santa Clara. The latter is home to the tech world, which has sent many employees home to work remotely.

When weighing whether to live in the rural landscape adjoining vineyards versus the concrete jungle of San Francisco or San Jose, the choice becomes obvious for those seeking an ideal quality of life.

Another Napa Realtor, Matt Miersch, closed on a property last week for a tech worker, who in turn, referred him to a few others from a Cupertino company that sent its workers home for good.

They’re looking at $2 million properties “on the low end,” he added.

“They have a lot of disposable income and choose to not be in big cities and don’t want to,” Miersch said. “We could create a new norm with this, and we were kind of headed this way anyway (with more people working at home).”

Zillow economist Jeff Tucker has noticed the same trend with its tracking program.

The Seattle-based housing company’s data shows a 10% drop among San Jose-area searchers seeking shelter within their own region. Tucker has witnessed these prospects are reviewing options in “more affordable or smaller” areas such as Santa Rosa, Modesto, Fresno or simply elsewhere — away from the hustle and bustle of the South Bay.

Broken down, the stats indicate the share of Zillow search users from San Jose seeking housing in Santa Rosa has risen compared to last year at this time. Napa’s percentage has almost doubled too.

“They ask themselves: ‘If I could live anywhere,’ then (they) search,” Tucker said. “The bigger city Bay Area housing market has started to soften.”

On a national scale, 2020 has turned out to be a tough year for many sectors of the economy.

U.S. home sales saw a plunge of 9.7% in May, the third month of decline, according to the National Association of Realtors. Sales in the Northeast slumped the most by 13.9%. The median price of a home sold in May was $284,600, the Associated Press reported Monday.