Despite the traditional January slowdown and uncertainties surrounding the new presidential administration's policies, Sonoma County's housing market is demonstrating remarkable resilience, with multiple offers becoming increasingly common and cash buyers maintaining a strong presence in the market.
Competition Remains Strong Despite Market Shifts
if I asked you how many homes sold with multiple offers in January, what would you say? Anecdotally we have seen a number of transactions this year where we have experienced multiple offer situations. We aren't seeing 10 - 15 offers like we did in 2021 and 2022 but there was one property on Cunningham Road in Sebastopol that got 9 offers. We also aren't seeing prices pushed to 20% or more over asking because even the house that got 9 offers still only sold for 14% over asking. I just ran the numbers I must confess I was suprised to see that nearly 38% of homes that sold in January received multiple offers, suggesting that buyer demand remains robust even as inventory levels have increased significantly. Bear in mind most of these offers would have been put in during December just after the presidential election and during the holidays. This competitive environment persists despite a 46% year-over-year increase in available properties for sale through January, rising from 447 to 651 homes on the market.
The continued competition for properties indicates that while buyers have more choices, many homes are still attracting significant interest, particularly in the sub-$2 million segment. Santa Rosa leads with the highest percentage of multiple offers at 36.9%, followed closely by Healdsburg at 33.3%.
Cash Continues to Flow, Especially in Healdsburg
With interest rates high we would expect a good proportion of cash buyers. In January 26% of all purchases were cash which is definitely a lower number than at times in 2024 indicating perhaps that people have got used to the higher interest rates so are resigned to the fact that over 6% is the new normal. Healdsburg continues to stand out as a preferred destination for cash buyers, with an impressive 44.4% of transactions completed without financing.
Because Sonoma County is so close to the Bay Area, when we look at housing affordability measured by median home prices, median salaries and interest rates, for Bay Area Buyers, Sonoma County is still relatively affordable if you are getting a Bay Area salary.
Market Segments Show Distinct Patterns
Under $2 Million Market
The heart of Sonoma County's market - properties under $2 million - shows remarkable stability:
- Sales increased by 3% compared to January 2024
- New listings rose by 3%
- 38.6% of properties received multiple offers
- 25.7% were purchased with cash
- Luxury Market Adjustments
Over $2 million Market:
- Only 7 properties sold county-wide
- 42.9% were cash purchases
- Multiple offers were less common at 14.3%
- New listings decreased by 36%
Geographic Variations
Different areas of the county are showing distinct patterns:
Healdsburg
- Leads in cash purchases (44.4%)
- Strong multiple offer activity (33.3%)
- Continues to attract premium buyers
Santa Rosa
- Highest rate of multiple offers (36.9%)
- Moderate cash presence (21.5%)
- Remains the county's most active market
Windsor
- More moderate activity levels
- 22.7% multiple offer rate
- 18.2% cash purchases
What This Means for Buyers and Sellers?
For Buyers
While economic uncertainty and interest rates might suggest a buyer's market, the reality is more nuanced. For desirable properties, especially under $2 million, competition remains strong. However, this doesn't mean you'll face the extreme bidding wars of recent years. Here's what you need to know:
Under $2 Million
- When you find a property you love, don't hesitate to make an offer
- While multiple offers are common (38% of properties), prices aren't typically going way over asking
- Put forward a strong, clean offer - this market demands no sale contingencies
- With 25% of purchases being cash, ensure your financing is solid and pre-approved
Over $2 Million
- You have more flexibility and negotiating power
- Take your time to find the right property
- The market dynamics are in your favor, with significantly less competition
For Sellers
The market presents different challenges and opportunities depending on your price point:
Under $2 Million
- Turnkey properties that are priced appropriately continue to attract strong demand
- With inventory up 46%, your property needs to stand out
- Focus on three key elements: presentation, marketing, and precise pricing
- Properties that nail all three are still seeing multiple offers
Over $2 Million
- Patience is crucial - the absorption rate shows only 6% of properties selling in any given month
- This means 94% of properties in this segment aren't selling
- Your pricing and presentation strategy needs to be particularly sophisticated
- Be prepared for a longer sales cycle and adjust your expectations accordingly
Looking Ahead
While inventory levels have increased significantly (+46% year-over-year), the market's fundamentals remain strong, as evidenced by the continued presence of multiple offers and cash buyers. The sub-$2 million market shows particular resilience, with slight increases in both sales and new listings.
The high percentage of cash purchases, particularly in premium locations like Healdsburg, suggests continued confidence in Sonoma County real estate as both a lifestyle and investment choice. Even with new administration policies and potential economic changes on the horizon, the market's ability to maintain competitive bidding on well-priced properties indicates underlying strength.
For those considering entering the Sonoma County market, the current environment offers both opportunities and challenges. While inventory has increased, providing more choices, the persistence of multiple offers suggests that desirable properties continue to attract significant interest. As always, success in this market requires a well-thought-out strategy, whether buying or selling.