Experts believe that areas like Santa Rosa, California will determine the strength of any long-term market recovery. That said, the Santa Rosa population is largely comprised of recently married couples looking to buy their first home. With an average median age under 36, local demographics bode well for the Santa Rosa housing market and it’s propensity for growth. The California city is one of the few markets in the country that has seen steady price growth since 2009. With positive indicators and trends in place, there is no reason to suggest that this growth won’t continue for years to come. As a result, the Santa Rosa real estate investing community should start to see an uptick in activity.
According to Trulia, the current median sales price in the Santa Rosa housing market is $437,000. This represents a modest 1 percent increase from the previous month, and a 10 percent increase from one year ago. Not surprisingly, these figures are much higher than the national median sales price, as many of the cities in California have sales numbers that exceed most parts of the country. Many of the most expensive cities in the country are in California: San Francisco, San Jose, Los Angeles and San Diego are no exception. The national median sales price, on the other hand, is $208,000.
The total number of sales in the Santa Rosa housing market is on the rise. Sales increased from 400 last quarter to 550 today. This is an increase over last year, with the total number of sales trending upwards in 2015. With sales volume and prices on the rise, the Santa Rosa real estate market is trending in the right direction. As a result, Santa Rosa real estate investing should see more activity.
With rising home prices, it is safe to assume that equity appreciation has been on the rise as well. Santa Rosa appreciation has seen average annual growth exceed 1 percent over the last decade. Even in the face of poor real estate market conditions, the Santa Rose housing market has continued to thrive. Over the last twelve months, local equity has risen more than 11 percent, which is greater than 90 percent of the national markets. Last quarter, equity rose over 1.6 percent, which puts it on pace for an annual appreciation close to 7 percent. These numbers put Santa Rosa in the top half of all markets in the state of California.
Santa Rosa’s unemployment rate is currently 4.9 percent, which is slightly below the national average. For the state of California, however, Santa Rosa’s unemployment is well below the average, suggesting the local economy is in great shape. The current median household income is just under $60,000. Combined, these factors have led to a decline in foreclosures. According to RealtyTrac, there are currently only 284 properties in some stage of foreclosure in the Santa Rosa housing market (default, auction or bank-owned). This represents a 20 percent decrease from the previous month, and a 27 percent increase from this time last year.
Of course, these properties should attract buyers from all over the Santa Rosa real estate investing community, as their spreads are more attractive than non-distressed homes. The median sales price of a non-distressed home in Santa Rosa is $437,000. The median sales price of a foreclosure home, on the other hand, is $390,000, or 11 percent lower than non-distressed home sales. That is a savings of $47,000 per home. If that doesn’t make Santa Rosa real estate investing more attractive, I don’t know what will.
While home prices may be on the rise, home sales are down for the Santa Rosa market. Home sales were down 33 percent from last month, and 93 percent from this time last year. This has led to increased inventory, creating an opportunity for buyers to get properties they desire. Although buyers currently have the upper hand, home prices have still gone up. This speaks to the strength of the local real estate market. It also speaks to the desirability of the area and the relatively more inexpensive cost of living.
According to Trulia, some of the most popular areas – in terms of average list price – include Oakmont Village Association, Junior College Neighborhood Association and the Wright Area Action Group. The area with the biggest move in recent history is West Jr. College, which saw listing prices increase by as much as 23.6 percent in a week. Other big movers included Wright Area Action Group, Oakmont Village Association and South Park which all showed a minimum 3.5 percent list price increase.
Due to increased property supply and rising list prices, now is deemed by many renters as a great time to buy. Rental property is in high demand, even with rental prices having increased 5 percent over the past 90 days. With the median sales price numbers still far below list prices, it still may be less expensive to buy, given where current interest rates are. Unlike most other areas where the average home prices are just over $200,000; a minimum down payment in this market could be as much as $15,000 – not including closing costs or property taxes. This is a hurdle for many younger homebuyers in the market. However, it does appear that the market has turned a corner and more buyers are poised to explore their buying options. How quickly this happens will have a direct impact on average list prices, medium sales prices and even current rental inventory.
According to Zillow, appreciation rates should reach 2.3 percent in the next year. While this number is not overwhelming, it continues to exhibit steady growth. It is this progress that makes the Santa Rosa housing market so attractive. There is just enough foreclosure inventory that properties are still available at a discount, which leaves room for upward potential. These discounts will not be around for much longer, considering the appeal of the neighborhood and the local demand for real estate.
Santa Rose, California is a jewel in the heart of wine country. This area has grown steadily over the past five years, and shows no signs of slowing down. With strong unemployment numbers, rising list prices and a growing economy, there are solid pieces in place to carry the market for several years to come.
Santa Rosa Housing Market Summary:
- Current Median Sales Price: $437,000
- 1-Year Appreciation Rate: 9.7%
- Unemployment Rate: 4.9%
- 1-Year Job Growth Rate:
- Population: 171,990
- Median Household Income: $61,029