When Paul Saharoff tried last year to sell his Santa Rosa home on Alta Vista Avenue for almost $1 million, Sonoma County's red-hot housing market already had started to cool.
From late March to June 2018, Saharoff, 77, couldn't get any buyers for the home he'd owned for 33 years. "I could feel the market braking," Saharoff said. "It was also breaking my heart."
Finally, he's set to close a deal to sell the 3,228-square-foot, four-bedroom house. Saharoff cut the asking price by about $75,000 to put the house within a buyer's reach and was helped by lower mortgage interest rates.
At the halfway mark of 2019, the county housing market remains somewhat sluggish. The median single-family home price in June was $658,500, a sharp drop from the all-time record $700,000 median in June 2018, according to The Press Democrat's latest monthly housing report compiled by Rick Laws of Compass real estate brokerage in Santa Rosa. Meanwhile, there were 422 houses sold last month compared with some 429 home sales last June.
Through the first half of the year, there have has been 2,000 single-family homes sold countywide, a 6.45% decline from the comparable period last year when 2,138 homes were sold.
Last year, the local housing market was fueled by post-wildfire demand, which caused a price spike and a surge of sales. After shifting downward during the second half of 2018, the market has leveled off this year and buyers are slowly coming off the sidelines looking to use their leverage to get a good deal, real estate experts say.
"Right after the fires, we had a spike in prices even though the interest rates were going up. That is not a normal market," said Erika Rendino, the real estate broker who helped Sarahoff sell his house.
Rendino, co-owner of Remax Marketplace in Cotati with her husband, real estate agent David Rendino, said at the start of 2019 interest rates began to decline and have continued that trend. But Rendino and other local real estate experts say buyers still are spooked from last year's record-high pricing and many still haven't realized that they can get more house for the same down payment.
David Rendino said it's going to take buyers at least three more months to realize they now have more "buying power." It's not technically quite a buyer's market, but it's leaning toward buyers, he said.
"The lowering of interest rates has given some buyers the opportunity to purchase homes previously out of reach," he said, adding that every 1/4 of 1% decrease in interest rates roughly translates into a $10,000 increase in purchasing power.
Ross Liscum, a Santa Rosa real estate broker affiliated with Century 21 NorthBay Alliance, expects low interest rates to continue boosting housing market activity in the coming months.
"It feels like we're experiencing what we had in the past," he said, referring to pre-fire housing activity. "For properties that come on the market that show nicely and are priced competitively, we're seeing offers within the first week or two," Liscum said. "You have better buying power. You can buy more home with a lesser payment than you could have last year."
Otto Kobler, a mortgage broker and branch manager of Summit Funding in Santa Rosa, said Monday current interest rates for conventional fixed-rate 30-year mortgages were roughly 3.99%. Meanwhile, 15-year fixed mortgage rates were about 3.3%.
