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“Unchartered territory. Unbelievable, uncertain. Every word begins with ‘un’ in front of it.”
Craziness does not even begin to cover what’s going on in the real estate market in Northern California right now. Karen Maxwell, one of the top real estate agents in Santa Rosa, sat down with us for 30 minutes last week to talk about the aftermath of the Northern California firestorms, and how the real estate market is handling it.
Beginning on October 8th, 2017, 7,500 structures and 245,000 acres of land burned.
Above is an interactive aerial view of the damage that Robin Kraft, a native Santa Rosa resident, built for other homeowners and family members like himself.
So, one month, later, where are Northern California residents finding a place to call home?
The real estate market is in a state of gridlock.
According to Maxwell, “There’s nothing on the market for rentals. There’s no rentals available, there’s hardly any homes available. Homes that have been sitting on the market for 6 months at 2 million dollars…were just flying off the shelves like hotcakes. All of a sudden the fire hit and people are buying and selling homes that had been sitting for 6-9 months.”
According to HomeLight data, the real estate market in Sonoma county took a steep dip at the start of the fires, but in days after the containment began, sales crawled back up. In fact, sales are creeping back to the level they were at this time last year, despite fire cleanup and aftermath. This supports the seller’s market Maxwell was talking about. Instead of overpriced homes sitting on the market, they’re selling right away. As soon as a listing hits, buyers come in with their best offer.
Though it’s good for homeowners looking to sell, this isn’t ideal for homebuyers in affected Northern California areas.
Even if you find a house to buy, the odds are slim that you’ll actually get to purchase it, even with a competitive offer. With a supply and demand problem in the area pre-fires, the loss of homes has made available real estate 20x worse, said Maxwell. The competitiveness of the seller’s market means that buyers have to compete with 10-15 other offers, all significantly over asking price.
On top of this, people are starting to take advantage of the housing shortage.
Maxwell took a client to see a house listed at $699,000 that backs up onto a busy street. The client loved the house and decided to make an offer, so Maxwell set out to run a comparable market analysis. Oddly, when she started pulling homes together, the listing price online for this house was different than what she had on file.
“That day, probably while we were [viewing the house], the seller increased the price to $825,000….He increased the price by $126,000 dollars because of supply and demand.”
The real estate agent on the deal got so many calls from furious agents that she and her broker pulled the listing.
As you can see, in Maxwell’s words, “it’s a very volatile market right now. A lot of agents are now looking for other jobs, because we don’t know where our next listing is going to come from.”
So what’s on the horizon for the Santa Rosa, Sonoma County, and Northern California real estate markets? It’s a question that everyone is asking, but no one yet knows the answer to. There could be plans to develop entire blocks of homes all at once, after some significant work to clean all of the burned and affected areas.
As for now, agents are trying to trudge forward, help the clients they can, and figure out what to do next.
“It’s nothing like we’ve experienced before,” said Maxwell, “and we are in the trenches of uncertainty.”