COVID-19’s dominating effect on the economy continues to send ripples throughout markets on all levels. As the Bay Area’s housing market suffers from demand venturing north, the Sonoma county area faces a housing boom of its own.
Many are currently suffering from reduced or a complete absence of salary, and according to real estate and mortgage analysts Black Knight Inc., a mass of mortgage delinquency has come with it. A record breaking 1.6 million case jump was observed nationwide in the span of March-April, which the Federal Housing Finance Agency has stepped in to offer some assistance with. This assistance comes in the form of extensions and payment deferment. In spite of these changes, COVID-19 itself is having a separate effect on the housing market in Northern California: a shift in price and demand.
San Francisco has commonly had high prices for both home ownership and rent, largely due to it’s convenient proximity to many businesses that are located in the city. However, with the wave of work from home that’s come as a result of the pandemic, the need to live close to a physical office has diminished greatly. Rather than endure the high prices of the city, many are moving northwards to the Sonoma county area, particularly the suburbs.
Because of this, Sonoma County is experiencing a boom in housing demand, and with it, a rise in housing prices. Sonoma County Realtor Jenny Watson details the change as being a gradual, unexpected one. “We really thought it would bring our real estate market to a screeching halt…after the initial first few weeks, things shockingly picked up and took off at a wild pace.” The effects of this were drastic on a statewide level, with Sonoma County having one of the largest increases in home sales at 36%, according to the California Association of Realtors. This boom in real estate is not all positive for the county, says Watson.
The current housing market in Sonoma County is not an especially large one, particularly with COVID-19 leaving people hesitant to sell. Because of this, “The influx of buyers and the prices of homes going up at a disproportionately rapid pace, it creates a tough environment for many local people to stay in this area, whether buying or renting.”
Many of the same housing problems that have gradually accumulated in other parts of Northern California are happening explosively here in Sonoma County due to this extreme gap between supply and demand, and Watson doesn’t see any departure from this trend anytime soon. She believes that many of those who are allowed to work from home–even as pandemic restrictions eventually decrease will continue to seek out a place to live in Sonoma County. Rather than a decrease in demand, an increase in supply is more likely, as those who are reluctant to sell their homes in the current market are eased back into the idea along with loosened restrictions for the pandemic.
Watson also mentions that there is a downside to this trend and it’s continuation: many who are already in the community still will face hardship at the rising cost of living in this area, and will likely join the many who are moving out of California entirely in the search for a more affordable place to call home. “As many things are in this world, it is bittersweet–the rise in popularity that Sonoma County is experiencing is exciting, yet the implications of this newfound interest in moving here has proven to be a challenge for many.”
